You want to sell your home in the best way possible, so it\u2019s key to reach the widest array of buyers to achieve the greatest return on your investment. From choosing a skilled, experienced real estate agent to making carefully selected updates to your home, you want to take advantage of the seller\u2019s market across the country and gain interest from multiple buyers to drive up your sale price.<\/p>\n
But there may be one real estate trend you haven\u2019t tapped into yet: the overseas buyer.<\/p>\n
The National Association of Realtors reports from April 2014 to March 2015, foreign acquisition of residential real estate in the U.S. totaled $104 billion, a 13 percent increase from the year before and 8 percent of the total dollar amount exchanged in existing home sales.<\/p>\n
The U.S. real estate market has, in recent years in particular, proven a solid investment for foreign buyers not just because of increasing property values, but also thanks to its reputation as a good place for global businesspeople to place their money in a safe, hard asset.<\/p>\n
\u201cThey feel more secure investing in the United States as the world\u2019s largest economy \u2013 investing in the U.S. dollar,\u201d says Ross Milroy, owner and broker at Ross Milroy Realty in Miami, who works closely with many international buyers in the Miami market.<\/p>\n
Investment from Chinese nationals in particular has been overwhelmingly the largest source of foreign real estate buying in recent years. From 2010 to 2015, Chinese buyers purchased U.S. homes worth a total of $93 billion, according to a study looking at Chinese real estate investment conducted by the nonprofit organization Asia Society and real estate economics firm Rosen Consulting Group.<\/p>\n
Chinese investors have tapped into real estate in major markets throughout the United States \u2013 even in cities where foreign investment from Europe or Latin America has classically reigned.<\/p>\n
\u201cThe Chinese are looking abroad more and more, and we\u2019re seeing more Chinese people coming to Miami,\u201d Milroy says.<\/p>\n
It\u2019s not uncommon for wealthy individuals to diversify their portfolio by making investments in several markets worldwide, and Milroy explains assets in the U.S. are often a better place to securely keep money and build wealth.<\/p>\n
\u201cInstead of allocating those dollars, let\u2019s say, to equities in Europe or equities maybe in their home countries or U.S. equities, they put a certain percentage \u2013 a large percentage, generally \u2013 of their portfolio into hard assets, specifically real estate,\u201d Milroy says.<\/p>\n
But how do you know if your home would spark the interest of an international buyer? Here are some common features of the residences most highly desired by foreign investors.<\/p>\n
Cities with a global reputation draw more interest. It\u2019s no shock overseas buyers are most interested in property situated in a market they\u2019re likely to visit regularly. Cities like New York, Miami, San Francisco and Los Angeles receive a lot of interest from international buyers, as they frequently travel to these cities for business.<\/p>\n
\u201cMost international buyers are either wanting to use the property for a pied-\u00e0-terre or a secondary home or for investment purposes,\u201d says Alex Bush, manager at CityRealty, a real estate website dedicated to working with buyers and sellers to define their needs and connect them with the necessary real estate professionals in New York City.<\/p>\n
Condos are a safe bet. Condomimium ownership is often a preferred option for many international buyers, as they often offer heightened amenities, and they’re common in many of the particularly dense markets overseas investors are most interested in.<\/p>\n
\u201cThey really like the idea of buying essentially a piece of space between four walls in a building that\u2019s secure, safe, where all the maintenance is taken care of and where if they\u2019re not present, they can call on management to take care of it,\u201d Milroy says.<\/p>\n
In New York in particular, condos are typically preferred over cooperative ownership \u2013 a common type of property ownership in the city where tenants own a stake in the building. Bush explains co-ops can have strict rules about how frequently residents must occupy their unit, making them less desirable for an individual seeking a place for their American business meetings every few months or to rent out to tenants.<\/p>\n
\u201cIf an international buyer is looking for an investment property, they want to focus on a condo,\u201d Bush says.<\/p>\n
But that doesn\u2019t rule out other options. Gennady Perepada, a luxury real estate agent in New York who specializes in working with buyers who live primarily outside the country, says while many of his clients are interested in new condo developments being completed throughout the city, \u201ca lot of people buy brownstones and townhouses.\u201d<\/p>\n
While condos and townhomes provide most international buyers with the hot location they want for property value appreciation and to be close to any work they’ll be doing, Perepady also notes some buyers are interested in taking on a single-family home in the Hamptons or other parts of Long Island for vacation property.<\/p>\n
High-end homes are key. The common denominator among international buyers is that they are wealthy enough to be able to invest in property overseas, so it\u2019s without question they\u2019re interested in homes that reflect the lifestyle they\u2019re accustomed to living \u2013 or the \u201ctop of the top,\u201d Perepada says. He notes an international buyer’s summer home purchase in Miami could range between $350,000 to $10 million or $15 million, depending on how big a space they want, plans for its use and how often they intend to visit, among other factors.<\/p>\n
Milroy notes almost all buyers he works with tend to focus on a number of criteria when searching for a potential next home, including the building management, accessibility, amenities, pet friendliness and the quality of the building itself, which ranges from architecture and prestige to energy efficiency.<\/p>\n
He adds the origin of the buyer will often influence his or her purchasing priorities, simply because of differences in life experiences.<\/p>\n
\u201cSomebody from Mexico City and somebody from Bogota [Colombia] is going to be a little bit more concerned with safety and security than somebody coming out of Buenos Aires or coming out of other countries,\u201d Milroy says.<\/p>\n
Timing is less of a factor. The U.S. real estate market tends to follow a seasonal pattern, with a particularly hot market in the spring and summer and closings tapering off in fall and winter. But international buyers don\u2019t necessarily follow the same pattern, as Bush says, “We’re always seeing inquiries coming in from international buyers [throughout the year].”<\/p>\n
Selling to an international buyer can also take some patience. Since they don\u2019t live in the country full time, there is often a significant gap between traveling to the city to see the space a first and second time. But once an offer is made and accepted, you don’t have to worry about waiting for a lender’s approval since most overseas buyers pay with cash.<\/p>\n
To help the process move as smoothly as possible, overseas buyers may take advantage of full-service firms like Perepada\u2019s, which offer concierge services and facilitate renovations, property management and other necessary tasks as needed.<\/p>\n
Because the client can\u2019t fly out every month to check on the property or deal directly with construction contractors, Perepada\u2019s team takes the lead. It goes even further than real estate specific needs, Perepada adds: \u201cKids, mom, grandma \u2013 whatever they need. \u2026 We do full-service management.\u201d<\/p>\n