The future is here: Investing in the United States by Du

June 07, 2016 - Front Section
Richard Du of Agorafy, Inc., New York, NY Richard Du, Agorafy, Inc.

When looking at global economies, historically, the US has continuously prevailed as one of the top countries to attract foreign investors. The other powerful economies include Russia, China and most recently, India. All of these countries have managed to create profitable investment opportunities for foreign capital. But, the US is by far the place to be for foreign investors.

There is a constant dilemma as to which country’s economy is strongest and provides the greatest opportunities to attract the best foreign investments. Is it China, Russia, India or the US? We often see how all of these countries proclaim their individual supremacy within the global markets. The reality is that the American economy, despite its ups and downs, is far more attractive and secure than it competitors. According to the latest Foreign Direct Investment Report (2016), the US continues to retain its status as the top choice for international investment.

Therefore, we ask ourselves, whether you are a foreigner or not, should we be prepared to invest in the US? Why? The answer is very simple. Yes. Over the next 5-10 years, foreign investors will find America to be a continuously steady place to grow and thrive economically and socially.

During President Obama’s 2014 State of the Union address, he spoke strongly about the future of foreign investment in the US. “For the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.”

If anybody is hesitant about what is coming, let’s look at one of the most vibrant industries in America: Real Estate. The latest annual Association of Foreign Investors in Real Estate survey places American real estate as the most desirable activity among global property investors in 2016.

Real estate in the US has been a consistent favorite on the world map for many years, and 2016 looks to keep the trend going. Three out of the top most appealing six cities in the world for acquiring a property were in the US: New York, San Francisco, Los Angeles. After those were Paris, London and Berlin.

What does this mean for all the parties involved (brokers, buyers, sellers and investors)? The US will maintain its status as the world’s most attractive investment location. This will lead to more construction, apartment searches, open houses and further investments – plus more than 70 million baby boomers will be looking to invest or downsize. First-class brokers who deliver exceptional customer service will benefit.

Recently, Warren Buffett said: “…America’s economy will continue to grow and prosper for generations to come. For 240 years it’s been a terrible mistake to bet against America, and now is no time to start.”

Who wants to investment here and why? People from all over the world invest here. Foreign investors include the UK, Japan, Canada, Australia and European countries. But one of the biggest trends is the increasing growth of Chinese investment. China is the fastest-growing national investor in America, especially within the real estate sector. For instance, China’s middle-class rapidly emerged in the past decade. We can anticipate that millions of people are going to migrate because they recently became rich (middle class worth of $20 to $50 million dollars) and they want their kids here. A joint survey by China Merchants Bank and Bain & Co. showed that almost 60% of wealthy Chinese were considering emigrating had begun taking steps to do so or had emigrated already.

What makes the US desirable? American democracy is desirable and strong especially to foreigners from other countries where the combination of political uncertainty and volatile markets tend to lure foreigners. Additionally, quality of life is a notable factor. Families want their children to grow up in a safe and well-educated environment so that they have more opportunities to succeed in life.

According to US News, of the top universities in the world, the US is home to eight of the ten that were ranked. Having a U.S. education is important and carries weight. This is seen as a desirable factor for families moving here.

What does this specifically mean for real estate? People all over the world are in search of opportunity. Real estate in the U.S. continues to be an enticing option. Long term growth and home value appreciation are favored by the enormous supply and demand. The weaker the US dollar is; the more attractive property will become to foreign buyers. Although the current state of the economy worries many people, many of today’s trends indicate that things will continue to go well, overall, for real estate.

What does this mean for you as a broker? What steps will prepare you?

Focus on your career development. Strive to become an industry expert.

Master a segment of your market. Foreigners lean towards clustering - study the neighborhoods and target well.

Provide the best customer service by accommodating to your clients’ needs or schedule. Be adaptable, those unwilling to change will be left behind.

Understand which are the best tools (social media, video, personal brand/website) and what technology will give you an edge.

As foreign investors continue to increase, brokers will be needed to make the process easier for newcomers. Some companies are already specifically soliciting foreign buyers for future projects. People are simply following the new rule of capital – money will move where it’s treated best. So, continue doing what you’ve been doing if its working or be willing to reinvent yourself. This will allow you to capitalize. Those who invest with the long term in mind, should remember - what has worked in the past will continue to work in the future.

Within the next 5 – 10 years we will see foreign firms making new investments in the US. This will benefit America’s economy and society in numerous ways. Technology will also play a key role in providing incredible opportunities for investors to enter a market where efficiency will be served in all areas: construction, real estate, transportation, smart cities, banking, etc. New factories will arise, international companies will continue growing their well-established operations in the US, and others will start their businesses here. We will have more funds for research and development, and most importantly, millions of well-paid jobs will be available. This is what’s next for the US.

Richard Du is the founder and CEO of Agorafy, New York, N.Y.

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