Who Owns America? International Investors On The Rise

Real property in the United States of America is a good investment, for me and also for a Chinese investment group located in Hong Kong. Which one of us would you prefer to be your landlord?

American citizens and the increasing numbers of foreign nationals living in the US enjoy economic stability that far surpasses economic conditions in most parts of the world. Where people have steady jobs and thriving businesses, it can be good place to own the real estate beneath their feet. I see commentators speculating on the influx of foreign investment in US real estate, and many see it as a good thing. For example, R. Byron Carlock titled his recent post on National Real Estate Investor, “International Money Is Stretching Out The Recovery Cycle.” That’s optimistic, isn’t it? Commercial real estate is popular with big investors, but residential real estate is a desirable addition to the portfolio of many Chinese investors as well. TV and web-based RT.com posted the following: “Foreign buyers of US residential real estate surged 35 percent last year, with Chinese buyers, searching for moderately priced, safe investments in a sea of economic and political uncertainty, outspending the rest of the world…

“Chinese buyers spent $22 billion on US homes in the 12-month period ending in March [2014] or about 24 percent of total foreign sales by dollar value… “Foreign clients made up about 7 percent of transactions in the $1.2 trillion US real estate market.” Maybe 7% of US real estate transactions and $22 billion doesn’t seem like much, but it’s a warning signal to me. We’re not just selling homes and retail stores and offices and manufacturing plants, we’re selling the land, too. While other countries may welcome foreign investors, there are often restrictions on percentage of ownership (up to 50%) and in some cases you can only purchase the structures, but not the land. Here are a few interesting details I collected from sites catering to US buyers interested in second homes in other countries: 1) To buy land in Sri Lanka you’ll pay a 100% transfer tax levied on foreigners, which of course doubles the price to you 2) There are no restrictions on foreign purchasers of real estate in France, Spain, Italy and Nicaragua 3) You can’t buy land in Thailand or Cambodia because ownership is restricted to citizens 4) There are four categories of land in Mexico, only one of which allows unrestricted foreign ownership 5)

Hong Kong allows 100% ownership of real estate by foreign investors For now, my investment money is staying here in the US, so I guess I’ll be competing with investors from China, as well as many from Canada, Germany, Norway, India and Israel, among others, and maybe with you!

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