As the U.S.housing economy recovers, the rental markets are raking in a larger number of foreign investors.
The trend of buyers, purchasing homes and renting or subletting the property for a good price has been a tradition for a long time. However, it was mainly dominated by local players. Now that prices of the homes are affordable and mortgage rates are at their lowest best, foreign investors are finding the real estate markets quite profitable, reports Wall Street Journal.
A new trend of foreign investment firms purchasing property in the U.S. and renting them out for a profitable price has kicked off recently.
On the whole, foreign investment in the country has been rising due to increased availability of property. The total construction index in the country rose to hit record five year highs in January 2013, accounting for a 3 percent hike from the figures of December 2012. The weak dollar is another reason for increased foreign investment interest in the country.
However, the foreign investors are more inclined towards buying apartments and townhouses rather than single family homes. According to the American Monetary association, this is a practical saving strategy for the buyers. The American real estate market is a stable investment opportunity to businessmen who face political and economic volatility in their home countries.
This trend has driven local buyers to compete heavily with their foreign counterparts. Recently, CBS reported that foreign investors were driving the housing market in California, making property buying hard for local buyers. Prices of homes in the region have also surged due to influx of foreign currency.
"It's really amazing how much is gravitating this way because they view the U.S. real estate market as just being very, very safe." Jeff Lazerson, President of MortgageGrader.com told CBS.
Larger amount of interest seems to coming from China, Canada and Australia.
Billionaires all around the world have been dropping huge sums of money on American real estate. In August 2012, a Russian buyer purchased a huge mansion near 3 Indian Creek for $47 million.
More recently, China's Vanke Company made its debut in the U.S. market with a partnership construction deal. The deal might not have been an expensive one, but is sure to bring in good profits.
