Chinese buyers have dominated the conversation about foreign interests in U.S. real estate for years, but that trend appears to be shifting. According to research from the National Association of Realtors (NAR), despite massive spending on the part of Chinese buyers, the influx of Chinese capital into U.S. markets is waning. Chinese investors “only” spent $31.7 billion on U.S. real estate between April 2016 and March 2017, and that number is likely to fall thanks to tightened restrictions on how much capital residents can spend outside the country.

However, buyers from other countries do appear to be moving into the space left open. For example, brokers who cater mainly to foreign investors are reporting more buyers from Taiwan, Vietnam, Thailand, Dubai, Kuwait, Georgia, and Turkey. The reasons? Private property rights and relatively stability of the U.S. housing market.

These foreign buyers are interested in placing large chunks of capital in U.S. real estate in many cases. Because of the security associated with the U.S. housing market, many foreign investors opt to make large, one-time purchases of luxurious properties. According to Mauricio Umansky, CEO and founder of the Los Angeles-based brokerage, The Agency, about a third of the homes valued at $20 million or more that his brokerage sold in 2017 were sold to foreign buyers.

It appears that foreign buyers’ preferences are often regional and, not surprisingly, dictated, to an extent, by the availability of travel options into the area. For example, one real estate agent reported that she is seeing fewer Chinese buyers in Miami, Florida, in 2018, but noted that there are no direct flights from Asia to Miami. On the other hand, about 90 percent of that brokerage’s luxury condo development buyers are from Latin America.

Does this mean that real estate investors making more “modest” offerings cannot hope to draw the interest of foreign buyers? Not at all! However, buyers interested in turnkey rentals, for example, will likely have very different priorities than those buying multimillion-dollar condos. Look for investors of any nationality interested in solid, reliable cash flow and returns, and you should find an eager audience of potential buyers.

Investor Insight:
Simply catering to wealthy Chinese real estate investors may no longer be the key to successful real estate investing with foreign investors.


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  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at SelfDirected.org or reach Carole directly by emailing Carole@selfdirected.org.

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