The housing market is still bad; however, people are still willing to invest in real estate because of the hundreds of foreclosures. Even foreign investors are getting in on the action.
Real estate investment in the U.S. is more popular than ever, and many foreign investors are purchasing homes here in the States. There are several reasons why the USA real estate market is working. Investors are making huge profits from small investments. For some reason, the USA is quickly becoming one of the most popular locations for real estate investment. It’s important to understand why: The opportunities are abundant, thanks to foreclosures.
1. Economic Factors– Despite the recession, the U.S. has the world’s largest economy and we are one of the largest countries in the world by area and population. We also have a Gross Domestic Product of over $14 trillion, and the cost of living is relatively low compared to other countries. The United States has a market with a modern infrastructure and large finance and property aspects.
2. Favourable Business Atmosphere – The United States has a positive approach to economic and cultural growth, as well as rising business and entrepreneurship, despite the current economy. This affords lower business taxes and a fairer legal system. Because of this, it makes investing, buying and selling much easier and much quicker. This entrepreneurial spirit gives way to more support for investing and allows a larger base of investors to participate.
3. Diversity– The United States is extremely diverse. The U.S. is a multicultural society with many climates, terrains and lifestyles. We have something to offer everyone. Anyone who moves here can choose to live in large metro areas or relaxed places near the beach or in the desert. This diversity is also an example of tolerance and acceptance. It makes us an open and acceptable culture that provides for favourable conditions in regards to real estate investment. It also means there are many options and choices when considering investing in properties here.
4. Lack of language barriers– The U.S. is mainly an English-speaking country, but because of the vast diversity, many citizens are bi- or multi-lingual, so communication and transactions are simple and it means foreign investors don’t have to worry about language barriers when they are conducting business here in the U.S.
5. Large Below Market Value Property and Foreclosures– With the mortgage crisis, there was a major increase in the number of foreclosed properties. Home owners weren’t able to pay their mortgages which ultimately lead to banks repossessing the homes. These huge foreclosures allowed for the growth of the below market value property market, which gave the opportunity for investors to purchase. Because of bank repossessions, properties are now available far below the regular market price. Price is critical when it comes to real estate investments, so a below average market value is quite appealing to investors, both foreign and domestic.
6. Potentially High Returns – With homes being sold at below market value prices it means the potential for high returns on the investment are great, which makes the risk even lower. Net returns on U.S. property is anywhere between 12% and 15% per year. With the combination of the many BMV properties available, favourable business and investment opportunities, and the low risk of investments make our real estate market very attractive and lucrative.