Should I Invest Internationally or Domestically?

If you’ve asked yourself this question before, you’re not the only one.

In today’s world, Commercial Real Estate (CRE) investors are apart of an international, interconnected market that’s determined by fluctuations in the economies of all nations, whether they’re spending their dollars in the U.S. or Tokyo. In nations like the U.S. and Canada, foreign investment is a massive driver of both commercial and residential market conditions and it’s why major cities like Seattle are considering a tax on foreign investment to preserve affordable housing prices.

Just look at the numbers: in just twelve months, foreign buyers invested a whopping $85 billion in U.S. commercial assets with international capital sources spending $19.1 billion, according to National Real Estate Investor. In the U.S., Chinese investment surpasses any other nation with $7.68 billion worth of investment.

With all this in mind, you’re still probably wondering, what are the perks to investing domestically versus internationally? Here are a few brief explainers:

In Commercial Real Estate International Business Trends, a 2017 survey released by the National Association of Realtors, global sales volumes for investment properties totaled $825.7 billion last year and the majority of international investors are plucking up hotel, office and development properties in large, metropolitan areas.

In short, international investment produces income-generating properties that not only provide investors with financial security, but also act to boost the potential of major cities across the globe, such as Austin, Denver, Nashville and Las Vegas in the U.S. For investors, holding international CRE doesn’t always have to be costly, and most of the time, value grows tremendously. According to International Living, international CRE provides investors with control, a stable cash flow in another currency, a hard asset and flexibility. What’s not to like?

When it comes to domestic CRE investing, understand that there’s a reason why so much foreign investment is flooding into the U.S. According to a report from RealtyMogul, seven major global markets experienced faltering conditions just last year, making safe harbor nations like the U.S., for example, a prime spot to invest.

According to ADHI Schools LLC put it best when they said, “Real estate investors, wherever they are located, would like to profit and the U.S. has the world’s largest economy with the world’s largest real estate market that is recovering and growing.”