If you need assistance, please call 914-290-5258

Who are these buyers and why do they talk funny?

Wednesday, July 9, 2014   /   by Vanessa Saunders

Who are these buyers and why do they talk funny?

As our company name implies, Global Property Systems specializes in finding internationally-based buyers for New York and New Jersey properties. So far, this strategy has proven quite successful because of one very fortunate bit of providence: many buyers are investing in American real estate as a way of protecting their money. We have become a safe-deposit box for the world's wealthy.


Nowhere is this trend more apparent than in Manhattan. According to PropertyShark, roughly 30 percent of condo sales in Manhattan high-rises since 2008 have been purchased by buyers with overseas addresses, or bought through an entity like a limited-liability corporation, a tactic common in overseas real estate transactions. We see it in "upstate" sales as well. Foreign buyers are interested properties in Westchester, Rockland, Orange, even Ulster and Sullivan counties as real estate investments.


Foreign direct investment in U.S. real estate topped $50 billion in 2012, according to the Congressional Research Service. RealtyTrac, which monitors real estate transaction nationwide reports a recent rise in all-cash sales in the metropolitan areas of Florida and New York City. Well over half of all transactions in the first quarter were handled without financing. Cash purchases are a good indicator of international transactions.


So why are investors so attracted to buying here? Some are looking for green cards and are taking advantage of the United States' EB-5 visa program, which confers instant green cards to investors spending over $1 million on a property and employing American workers.


But there is another far more compelling reason foreigners want to buy American real estate. Investing in property, especially in New York, is an excellent way to stash cash safely from the prying eyes of their home country's tax men, divorcees, or anyone else who wants a piece of an investor's pie. It used to be that such funds would end up in a numbered Swiss bank account or a Cayman Islands bank. But the U.S. government has put significant pressure on such cash hideaways, forcing them to reveal the identies of some account holders.


Why is property, particularly American property, and especially New York property so desirable? One answer is that while real estate has significant drawbacks as an asset—it’s illiquid and costly to manage—it has a major advantage in that the transaction can be rendered financially opaque. With a little creative corporate structuring, the ownership of a New York property can be made as untraceable as a numbered bank account used to be. Another reason is the stability of the U.S. dollar, at least compared to other countries. China, Italy, India, Nigeria, Argentina, Brazil, the list could go on much longer, are all having economic troubles of one kind or another. Wealthy investors see America as a good place to plant their money.


Many are looking for properties which will generate more cash - rental and commercial properties. But many, especially those with one or two million to set aside, are happy with a New York condo or an upstate lake home as a vacation spot. The Census Bureau estimates that 30 percent of all apartments in a square defined from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.


The third reason is value. A million dollar property on a lake less than an hour from Manhattan is a mansion compared to a million dollars worth of house on Lake Geneva, Switzerland. In New York City, a million dollars will buy twice as much space as it does in Monaco or Hong Kong.


So don't be surprised if a buyer with a foreign accent and a suitcase full of cash comes knocking on your door. Foreign investment is a very real player in New York's real estate game.


 


originally posted at WeSellNY.com/Blog

Global Property Systems
Vanessa Saunders MBA MIMC CIPS - NYS RE Principal Broker
56 Lafayette Avenue Suite 320
White Plains, NY 10603
914-290-5258


NY.png


NY.png

The data relating to real estate for sale or lease on this web site comes in part from MHMLS. Real estate listings held by brokerage firms other than Vanessa Saunders - Global Property Systems are marked with the MHMLS logo or an abbreviated logo and detailed information about them includes the name of the listing broker. The information appearing herein has not been verified by the Mid-Hudson Multiple Listing Service, Inc. or by any individual(s) who may be affiliated with said entity, all of whom hereby collectively and severally disclaim any and all responsibility for the accuracy of the information appearing at this web site, at any time or from time to time. All such information should be independently verified by the recipient of such data. This data is not warranted for any purpose. ©2021 Mid-Hudson Multiple Listing Service, Inc. All rights reserved.
The data relating to real estate for sale or lease on this web site comes in part from One Key, Inc. Real estate listings held by brokerage firms other than Vanessa Saunders - Global Property Systems are marked with the One Key, Inc logo or an abbreviated logo and detailed information about them includes the name of the listing broker.

The information appearing herein has not been verified by One Key, Inc or by any individual(s) who may be affiliated with said entities, all of whom hereby collectively and severally disclaim any and all responsibility for the accuracy of the information appearing at this web site, at any time or from time to time. All such information should be independently verified by the recipient of such data. This data is not warranted for any purpose.

©2021 One Key, Inc. All rights reserved.

The data relating to real estate on this website comes, in part, through the IDX of the Multiple Listing Service of Ulster County, Inc. Real estate listings held by brokerage firms other than Vanessa Saunders - Global Property Systems are marked with the IDX logo and detailed information about them includes the name of the listing broker.
This site powered by CINC: www.cincpro.com