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Foreign Investors Buying Big in US

July 16th, 2015 garnerproperties
Foreign Investments


Investing in rental property and commercial real estate has been a sound strategy for decades, and the market continues to stay hot with many buyers and investors. Most noticeably, though, foreign property owners and potential buyers have streamed into the U.S. market in recent years, with Chinese buyers leading the way according to a recent National Real Estate Investor report. Let’s take a look at what’s behind this recent trend.

Foreign Property InvestmentRetail Recovery and Location, Location, Location

One driving factor behind commercial real estate investments in recent years is the recovery of the retail marketplace. As the market has improved in the wake of the Great Recession, investors are quickly working to chase down prime locations in high-traffic commercial and shopping areas as investments that are expected to grow in value as the retail market continues to improve and grow. According to the NREI report, New York City-based Real Capital Analytics noted a 20 percent year over year growth in investment activities within retail real estate from April 2014 to April 2015.

While the growth of retail property sales has boomed, retailers themselves are still catching up. This points to signs that these foreign investors are planning ahead, securing locations in advance of the expected rise in retail investment, growth and expansion and locking down great properties today. Led by investors from China, Japan and Australia, this retail investment swing has also attracted European investors who spent a combined $3 billion in the first quarter of this year alone, according to the NREI article. With notable big buyers in recent months – including Spanish investment firm Ponte Gadea’s $176 million investment in Chicago and a $68 million investment in Miami by German’s hausInvest – the retail real estate sector around the country is definitely appealing to investors from around the world.

Chinese InvestorsHome, Sweet Home

Residential investments are on the rise as well, with Chinese investors diving into the homebuying market in the U.S. According to a recent Barron’s article, buyers from China, Hong Kong and Taiwan spent $28.6 billion in residential purchases from April 2014 to March 2015, with average home prices of $831,000 – more than three times the average purchase price of homes bought domestically. This staggering volume also represented a significant growth in the volume of home closing transactions, moving from 9 percent from the prior year to 16 percent during that period – leading foreign investors for the first time.

The reason for residential investment varies dramatically among these buyers, with nearly 40 percent of homes purchased intended to become primary residences, according to a National Association of Realtors study cited in the Barron’s report. Seven percent more were purchased as homes for children who are attending college in the U.S., while another 23 percent were purchased as rental properties.

How Can Garner Properties Help?

Foreign InvestmentsAt Garner Properties, we have more than a decade of specialized expertise at helping foreign investors from around the world find, manage and rent their investment properties. We currently work with rental properties owned by clients in Britain, Australia, Canada and China, and we have developed a partnership with a specialized accounting firm to help investors from outside of the U.S. manage their required tax forms and documentation as well as create rental property management entities to control and protect their portfolio of properties.

We have also worked with those looking to break into the market or further expand their holdings, as well as those who are looking to divest their investment properties. With our comprehensive knowledge of the property markets in both Detroit and Indianapolis, we can help identify prospective investment properties in attractive neighborhoods and highly rentable areas for anyone looking to invest. In addition, our comprehensive management services help take care of the day-to-day needs of any property, including tenant screening, rent collection, maintenance issues and much more.

Let us help with your investment property needs. Contact Teressa Harbin, Garner Properties’ director of marketing and real estate sales, or call us directly today for help with finding the perfect place for your first or next investment!

Written by garnerproperties

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