Huge Increase Predicted for US Based International Property Investors

Based on the Propertyshowrooms.com visitor and enquiry statistics, interest from Asian clients is already up 25% from last year. 

Furthermore, records from the first and second quarters of 2007 indicate a predicted annual increase in interest of around 200% (compared with 2006) from US investors looking to buy overseas property.  Interestingly, over one third of US enquirers have expressed an interest in using real estate purely for investment purposes.  So just what factors are now causing such unprecedented volumes of serious US investors to look beyond their own borders for real estate investment?

The internet has doubtless opened lines of communication and worldwide research possibilities, allowing more information to filter to the USA.  This, in turn, has widened US investor horizons, exposing hitherto unknown worldwide investment possibilities that, with increased knowledge and a new global view, are now trusted, viable investment propositions for many US buyers.  Propertyshowrooms.com is pleased with this global trend, seeing it as a positive way forward for worldwide investors to profit from the many worthwhile real estate markets and opportunities out there, without being limited to the more traditional options they have always subscribed to.  Gareth Milton. Operations Manager at Propertyshowrooms.com comments, "The increase in visitors and subsequent enquiries from outside of Western Europe has brought with it a number of new challenges, including languages, time zones and differing taxation laws.  However we are continually developing our expertise both internally and externally through our substantial network of partners in these locations who provide invaluable support."

US institutional investors are now focusing on international property while, as little as five years ago, REIT publicly traded real estate was a distinct rarity outside the USA. But today real estate investing has become an international affair, with US global mutual funds more than doubling in the past two years, and no signs of receding. Charles Schwab & Co., who recently launched the Schwab Global Real Estate mutual fund, recommends investors should have about 3% to 5% of their funds in overseas property, noting that adding foreign real estate to a portfolio increases returns and reduces overall risk.

Latest figures reveal that four million US citizens now own property abroad - a much higher proportion than among UK citizens.  This seems somewhat surprising considering the weak Dollar against other currencies making foreign real estate slightly more expensive for Americans.  In addition, Americans have tax considerations to address while they continue to be taxed as if they are resident in the country and inheritance tax and retirement savings need to be arranged so that they will not be liable for hefty tax bills.  However, the exceptional opportunities available in today’s worldwide emerging markets are too lucrative to be overlooked by serious US real estate investors.  In fact, Ibbotson Associates, a Chicago investment-research firm, recommends that foreign real estate should equal about 8% to 9% of an investor's portfolio.

Americans are not only concentrating on stock market-owned real estate; individual investors are also increasingly looking to buy abroad due to the record levels US house prices have hit today. A weakening housing market and the weakness of the dollar today make foreign real estate an exciting option.  In relation to average income, The Economist calculates an over-value of an average 30%, making more affordable overseas real estate investment a highly tempting option for many enterprising buyers with global vision. 

According to Propertyshowrooms.com, US buyers have shown the most interest in Spain, particularly the fascinating cave houses in Southern Spain’s Almeria, with France and Brazil coming in at close second.  Typically, they contact the site and are assigned a dedicated advisor who will help identify the correct type of property to suit their particular investment criteria.  They are helped every step of the way, from securing a mortgage to finding a recommended local attorney to ensure all the title documents are in order.  Owners then often turn their real estate over to property management firms to generate income.  In many cases, investment properties offer guaranteed rental agreements, ensuring income for a certain number of years and allowing investors to cash in not only on a buy-to-let investment, but also the substantial capital growth the property is set to attract over the investment period.

Gareth Milton reveals, “US buyers have been showing quite an interest in the cave houses we are offering in Almeria, southern Spain. This is largely because they offer a truly affordable and quite unique style of property, located in an easily accessible area of Spain, so famous for its outstanding natural beauty”.  For between 20,000 EUR for a 5 roomed un-reformed cave to 95,950 EUR for a 3 bedroom fully reformed, stylish cave home, you can be the proud owner of a Spanish cave!  Literally gouged out of the rocks as shelters during the Moorish invasion of Andalucia, these previously “Flintstone-like” abodes have come a long way over the years in terms of modern convenience – in fact many are enough to make Fred and Wilma Flintstone turn bright green with envy!  Once reformed, the cave houses come complete with mains water, electricity and telephones, offering comfortable rural Spanish living while set in stunning countryside with mountain views.  Cave homes vary in style, each with its own unique dimensions and format.  Some are built entirely underground with no additional frontage. The disadvantage of these is of course the lack of windows; meanwhile one of the main advantages is the natural insulation, keeping the temperature in the region of the 20°C all year round. Other homes are extensions of the cave, with the benefit of a more attractive exterior and more natural light throughout the year. 

Cave hotels have recently sprung up, catering for the large numbers of tourists visiting the area and they clearly indicate a strong tourist market to support buy-to-let investments.  Rural tourism is indeed an emerging market all over southern Spain, replacing the more pricy options in the saturated Spanish coastal resorts.  Being located in the hills, a short hop from Granada and with a good road infrastructure in place, investors and tourists are increasingly looking for well-located hideaways such as this in which to enjoy the best of all things Spanish.  With fairly low rainfall in the area, mild winters and long, hot summers, the weather in this area is ideally suited to cave dwelling.  Gareth Milton adds, “Caves are very eco-friendly and cheap to run with the added benefit of the virtual non-existence of council taxes when compared with more usual types of property. There is no need for air conditioning, hardly any need for heating and virtually no outside maintenance or roof repairs to be considered, all contributing to their overall appeal to investors from abroad”. 

In this era of globalization, it is an undeniable fact that the world is effectively becoming smaller and far more accessible.  Internet, air travel, world economics and an internationally-oriented mentality all help investors to look at every option, regardless of geographical distance.  Propertyshowrooms.com is the first to agree that this can only be good news for all types of US and other global property investors, all of whom have one aim in common; to seek out their best options in international real estate, one of the most lucrative and exciting investment arenas known today.

Resources :

International Property Investment Network

Property Investor Trends

View Actual Cave houses currently up for sale