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The International Real Estate Investor By Patricia Tan

Go Global

The Changing Face of the International Real Estate Investor

By Patricia Tan

Overseas purchasers of Florida real estate are attracted to our shores by many of the same things that draw people from the northern U.S.A. and Canada. Our reputation as the Sunshine State, beautiful beaches, availability of outdoor activities and water sports and relatively low cost of living have continued to entice retirees and buyers of second homes to invest in our real estate market. We have however, in the course of our international marketing activities over the last year, seen some significant changes in the profile of overseas buyers.

First, we are seeing an increase in the number of foreigners who wish to reside here on a more permanent basis. Citizens of many European countries perceive their standard of living has dropped. We encounter more people who look to U.S.A, and Florida in particular, as a destination for emigration. The emigration strategy for these people may take time, and usually involves a significant financial investment on their part. In addition to buying a home for their family, they often bring funds to start a new business, purchase an existing company or make an investment in a larger corporate entity that will support their visa application. Such investments have an impact on our commercial and residential real estate markets. They involve a significant financial commitment and may take several years to realize, but their impact on our local economy is substantial.

The second “new” kind of international buyer we are seeing in our market has been drawn here by the dramatic price decreases in residential real estate. These investors are buying residential properties to hold as rental investments. Our real estate market is such that we can now offer residential rental properties that will provide good cash flow, immediate return on investment and potential for capital appreciation in the future. These investors are drawn to lower priced properties with minimal holding costs that are attractive to tenants. They make quick decisions based on a property’s financial picture rather than the emotional considerations given to a personal home purchase. They usually pay cash, as funding a mortgage payment every month will diminish cash flow advantages.

The third group of buyers, are larger investment groups who find themselves with cash available to purchase distressed properties on a bigger sale. They are looking for completed or partially completed residential projects, condominium towers, multi-family housing and more recently have shown in interest in distressed commercial properties.

While the motivation of each of these groups is very different, they are drawn here for some of the same reasons:

• Florida’s outlook for long term population growth.
• Relative weakness of the U.S. Dollar on world currency markets.
• Signs that sectors of our property market have “bottomed” – stabilizing prices, increased volume of sales, reduced levels of inventory.
• Market transparency, making it easier for them to assess a potential purchase.
• Our reputation as a business and tax friendly state.

It will be interesting to see how these trends develop during the course of 2010 as we implement our marketing plan for real estate shows and seminars around the world.

Patricia Tan was born in England, and moved to Sarasota in 1997. Her career afforded her the opportunity to live and work in many countries around the world, including Australia, Hong Kong, Singapore, Malaysia, Indonesia, Germany, France, Belgium, Netherlands and the United Kingdom. She spent five years as a Director of an American real estate franchise in England in 1990s. Patricia has served as Chairperson of Sarasota Association of REALTORS®’ International Council, and serves on Florida Association of REALTORS®’ International Operations Committee. She currently works as International Sales Director for Prudential Palms Realty. Patricia may be reached at 941-487-5107 or patriciatan@prudentialpalmsrealty.com.

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