Buy or Sell?  The conundrum for Foreign Property Investors in the U.S.A.

 

The following informative article was recently written by a dear friend of mine, David Nixon-Business Development Executive at Currencies Direct.

When you buy an investment property in the US you’re probably motivated by a number of reasons.

Perhaps you want a destination for family vacations, maybe it gives you an additional income from rentals and – of course – there’s always the likelihood of your property increasing in value.

Buying a property in the US is, in effect, an investment in the US economy. That’s why Wednesday’s Federal Reserve announcement of the first interest rate rise since the birth of the iPhone is not necessarily a bad thing.

With economies all over the world in turmoil, the US dollar continues to be a safe haven. The decision to raise rates was data dependent, and that data has been positive enough to bring about this change: Compare that to the Europe, Canada, Brazil or China where troubles in the respective economies have been well reported.

If you want to buy an investment home in the US, it means you should be keeping a close eye on not just the fluctuating property prices, but also on the strength of the US dollar. The US economy has gone from strength to strength over the last 18 months, especially when compared to the countries of some other major currencies.

Take this example:

In the last 18 months, property prices in the vacation property haven of Polk County in Florida have gone up 8.6%. For a realtor this is an excellent selling point to attract new international clients.

It means that a property bought in June 2014 for $200,000 is now worth around $217,200. Typically, expectations are that property values will continue to rise steadily.

The currency rates are far more volatile. They can go in your favor or just as easily move against you. Look at the difference of major currencies in the same time frame (June 2014 – November 2015):

Great British Pound Sterling

US$200,000 in June 2014 was worth around £117,647. Today, it’s worth about £133,333 – an increase of 12%.

Canadian dollar

US$200,000 in June 2014 was worth in the region CA$216,000. Today, it’s worth approximately CA$268,000 – an increase of 20%.

Euro

US$200,000 in June 2014 was worth roughly €146,000. Today, it’s worth around €188,000 – an increase of 22%.

Brazilian real

$200,000 in June 2014 was worth somewhere around R$440,000. Today, it’s worth about R$830,000 – an increase of 53%.

This data could be great for those realtors who want to attract listings, and could also be an indicator to those of you who are foreign property investors that now is an excellent time to sell.

However the same data, coupled with continued uncertainty in the rest of the world, may also be a persuasive argument for now being the right time to invest in a property in the US.

David Nixon

david.n@currenciesdirect.com

Advertisements

Annalisa Weller, Realtor®, Certified International Property Specialist

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 336 other followers

List of Categories

Monthly archive of my posts

RSS PROView-Pinellas Realtor Organization

  • Brandi Gabbard & Penny for Pinellas are a win for St.Petersburg and the Realtor® Party. November 13, 2017
    The Pinellas Realtor Organization (PRO) supported candidate, Realtor Brandi Gabbard has won a seat on the St. Petersburg City Council, defeating Barclay Harless 61 percent to 39 percent. Gabbard is now the fifth woman on the council, joining Darden Rice, Amy Foster, Lisa Wheeler-Bowman and newcomer Gina Driscoll. We are proud and honored to count Gabbard as […]
    Josh Cruz
  • We’ve Got Florida Covered: PRO Members on National Association of Realtors 2018 Committees November 6, 2017
    Josh Cruz
  • Member Thomas Grayson passed away November 3, 2017
    GRAYSON, Thomas Nash 74, died unexpectedly October 12, 2017 at St. Anthony’s Hospital. Born in Bluefield, WV, January 29, 1943 to Edwin and Audrey Grayson, Tom moved with his family to St. Petersburg, FL, in 1958, where he attended St. Petersburg High School and later graduated from Largo High after the family moved to Seminole. With […]
    PROView
  • ‘Welcome’ to all our new members who joined us in October November 2, 2017
    The Pinellas REALTOR® Organization would like to welcome all of our new REALTORS® that joined us in October! We are happy to have you as a part of our organization and wish you much success in your careers. Abi Road Realty LLC Justyna  Ciszkowska Ameri-Tech Realty Inc Abin  Taraj Belloise Realty Tropical Yolanda A. Belloise […]
    PROView
  • Bubble? Nowhere in sight for U.S. housing market. October 25, 2017
    GREENSBORO, N.C. – Oct. 24, 2017 – U.S. housing markets are expected to remain healthy through at least the end of 2018, with no housing bubble in sight and no projection of home prices falling, according to the Fall 2017 edition of The Housing and Mortgage Market Review (HaMMR), released by Arch Mortgage Insurance Company. […]
    Josh Cruz

Visit Me at Active Rain

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: