What Motivates Inbound Investors?
To ensure seamless and efficient international transactions, commercial real estate professionals must understand the factors that motivate international investors to place their money in U.S. properties.
Safety. The U.S. is regarded as the safest and most stable country in the world in terms of politics and investment. This stands in sharp contrast to parts of the world where terrorism, political unrest, and lack of regulations threaten investors. An increasing number of global multimillionaires have made fortunes in their native countries, but now need safe havens to diversify and protect their accumulated wealth.
Affordability. U.S. real estate is regarded as affordable in comparison to similar properties in Europe, Japan, the Middle East, and South America. Combine this with a weak dollar, and U.S. real estate is a bargain when seen through the eyes of international investors.
Favorable Tax Laws. U.S. tax laws benefit international investors, providing at times for the payment of tax-free interest by U.S. taxpayers and financial institutions to international investors, tax-free capital gains, or capital gains tax rates of 15 percent.
For more on tax laws affecting international investors, see Commercial Investment Real Estate's July/August 2006 Tax Watch.