What A Single Flight Abroad Can Teach You About Real Estate Investing In America
Travel is one of those things that makes life richer. There are so many places to go. Just one flight abroad might even open your eyes to a lot about investing in real estate in America today.
We’re almost to that point in the real estate cycle when we’ll start seeing a lot more overseas property investments being marketed around us. Some are exciting. For some owning a condo on the beach in our favorite vacation destinations would be a fantasy come true. In other cases, exotic locations will have developers promising amazing rates or return. It’s seductive.
However, if you go, and keep your eyes open, you might just realize why the US continues to be the favorite country in the world for international buyers and investors, no matter what the market is doing in a given month.
Return on investment is important. Yet, no advertised rate of return is worth much without the safe return of investment. You need to be sure your capital is safe. Even if you make no return, at least you’ll have the money to reinvest. Investing in some barely heard of islands or re-emerging third world country, might ‘promise’ the chance of huge returns, but too often you’ll find out there is little protection for property owners. There could be a habit of the government seizing property on a whim, or just no good justice system to defend owners from corruption, crime, and squatters. Savvy global investors prefer the US for its stable government and property protections.
The true value is, of course, a combination of factors, including returns and peace of mind. Many still think there are hidden unspoiled retirement destinations out there that are super cheap and offer a lot of value. Of course, price and value can be completely uncorrelated. Cheap isn’t always a better deal. More expensive doesn’t always mean better quality. Go to Costa Rica for example, and you may no longer find prices any better than in the US. Where you do find cheap property there may be no reliable infrastructure or solid fundamentals. Or you can go to Western Europe or Canada and find properties are far, far more expensive than in the US, and make our priciest cities look like ridiculous bargains. In London, property prices can top $10,000 a square foot. You can get prime property in many parts of the US for a twentieth of that. Go to Australia and you’ll find investors are just accustomed to buying negative equity properties. Crazy, right?
Demand is an extremely important factor too. You need demand to ensure you can exit and resell. If you are investing in income properties you need high demand from tenants. America consistently tops the world list of in-demand investment destinations. Wherever you go, you’ll probably find many people there wishing they could be investing where you live.
The above factors also contribute to consistency. No one likes wild unpredictability in their investment portfolio. You want that passive income coming in when you need it, and equity when you may need to cash out in an emergency. It’s true that America’s real estate market is cyclical. Though it is still predictable. There are also some investment property types which typically fare much better in both strong and leaner economic times, like multifamily.
Where have you traveled? Do you recognize some of these insights? How has is awakened you to the benefits of investing in US real estate?
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.