Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
I was reading a WSJ article today about foreign real estate ownership in the US (it's down to the lowest levels since they started keeping records) and thought this might be an interesting topic for the forums.
How do you feel about foreign ownership of real estate in the US? What are the pros/positives as you see it? Negatives? What effects do you think it has on communities (if any)? If you have any personal experiences with the issue, what have they been?
I have my own opinions on the subject but I don't want to color the discussion so I'll wait to chime in after we (hopefully) get a critical mass of postings. Also please remember as you're posting that personal/prejudicial attacks are not allowed in the forums. :)
Many countries make property ownership for foreigners very difficult, but we all were foreigners and not tha long ago. I bought property in california before I even had a visa, but I just knew i would live in Silicon Valley before long. And I had a visa and a job within a year. As long as the property is being taken care of and bills are paid I have nothing against it.
@JD Martindont see any issue with it at all. Investors from across the globe invest I. Many things here in the USA because of stable prices and especially for assets.
What is different than someone from Florida owning a rental in Massachusetts than someone in Spain or Canada? Canadian is probably closer.
As it relates to occupied homes personally a housing shortage I believe is a farce. There is plenty of housing across this country. We are building more homes than ever and have as of last year 16 million vacant homes.
Many countries make property ownership for foreigners very difficult, but we all were foreigners and not tha long ago. I bought property in california before I even had a visa, but I just knew i would live in Silicon Valley before long. And I had a visa and a job within a year. As long as the property is being taken care of and bills are paid I have nothing against it.
Are we discussing commercial or residential? Residential is ok in my opinion because of how fluid our world has become with the increasing ease of travel. Commercial becomes a problem when foreign companies/powers have access and/or control of national resources. For context: I grew up as a foreigner in a nation that never allows foreigners to buy land. Such a policy allows a nation to ensure the ability of its citizens to develop their own land but it was frustrating for my family as we were long term residents. The ideal scenario in my opinion would protect national resources and provide economical control for citizens while also providing a way for intended "lifers" to buy their own homes, start a business, and become a part of the national fabric.
@JD Martin The Pros - this is true free market if you believe in free market. It increases diversity of ownership. Allows for investment when US investors are feeling less financially secure. Infuses money into the US economy.
Cons- the market is more competitive. Foreign holdings could eventually put the economy at risk if they are too high or too concentrated in one foreign nation. Decreases opportunities for US residents. can drive up prices. You have to ask yourself if whole areas are bought out by foreign investors how that ties that areas economy to another nation.
We aren't as isolated as we think even without foreign real estate holdings.
I could see this turning ugly if certain political spins and viewpoint enter the discussion.....
I don't like the idea of foreign countries having huge financial control over large sectors of the RE market (or any US market for that matter) . Left unregulated, this potentially puts the US in a very vulnerable spot.
But if you claim to be a capitalist and a believer in the free market, then you cant have it both ways.
The more buyers on the market - the higher the prices. . I'll tell you by example of Cleveland- I'm here since 2008 and it was huge sale in 2009-2013. We had ROI=35-40% in pretty decent places, even 100% in East Cleveland.
Then west coast and east coast wanted to invest their money and get that kind of cash flow. I worked with investors both local and out of state. I can tell that local ones never paid the price which out of state investors paid. For our investors less than 30% is a nonsense (and I'm talking NOI - not gross ROI). Out of state investors paid cash and scoop up all the houses. Our PM=10% of the gross rent and it didn't stop them.
well, 10 years later, these out of state investors sold these rentals 5-7X of what they paid. Our local investors just get shocked about priced paid…..and our property taxes at least doubled because of these inflated values.
do you see the resemblance?
‘It’s the same with foreign investors….China doesn’t have pension accounts, real estate busted there recently, do people with money buy up everything in North America without site seen.
Canada is already out priced - while plenty of people couldn’t buy real estate there.
SF and LA has the same problem - foreign investor just park their money and drive prices up.
I'm selling my rentals for the last year and paying high taxes, too - just because I'm moving to another state…..but my rentals still has 15% NOI unlike houses in Toronto and SF, which might not appreciate again any soon.
My house after full remodel will be listed for $99,900 so people could get a mortgage and live there, but if rented - the rent is $1250-1300.
The same townhouse without any updates just get under contract for $71K and I bet it’s not o/o who bought it - investors!
we are counting our numbers, out of country investors count theirs….and we can’t compete with them as well as with corporations like BlackRock etc.
I don’t know if I’m pro that or contra….it’s a free country and everyone is free to invest their money …..just feel bad for people who priced out if the market - they can’t afford anything in this environment
If you're a foreign investor and you're investing in America, it's pretty telling. I'm not against it, I understand certain countries being barred, but it's what drives this country.
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