United States is one of the largest countries with plenty of available land. Domestic demand for purchasing real estate seems to be falling behind those of foreign investors. Despite the lure of very small down payments it doesn’t seem to be persuading enough. As reported by the Google Consumer survey shows 62% of Americans have less than $1,000 in their savings account.
In stark contrast, however large amounts of land are being purchased by foreign entities.
Foreigners are getting serious about buying american properties reports National Association of Realtors. In first fiscal quarter of 2017 there was a 49% increase over the previous year and the hit records numbers. Foreign buyers and immigrants spent an estimated $153 billion on American properties. The ratio is basically 50:50 between foreigners and immigrants.
Canadian real estate has soared and cities like Toronto and Vancouver have seen major price gains shifting Canadian investors interests to america. Canadian real estate purchases were a major factor in the surge.
Toronto real estate agent Elli Davis said buyers are cashing out and using the money to buy smaller homes in Canada and second houses to vacation the the United States. “The Canadians love your weather,” Davis said. “And we have more money because of our real estate market here – that’s really the answer”
Top Buyers of American Real Estate per the Realtor Association.
Concentration of purchases seem to focus on three states: California, Florida and Texas.
Florida attracts the Canadians.
California buyers are from China.
Texas was the preferred state for Mexican buyers
2018 has experienced a decrease from China buyers but other countries have come in to fill the gap. In the year between April 2016 and March 2017, Chinese buyers spend $31.7 billion on residential real estate in America. However, since mainland China tightened restrictions in 2017 on how much they get take out of the country, that figure has dropped.
Many countries recognize the security and stability of the U.S. market and some of those countries include but the most active seem to be the Asian buyers.
While encouraging foreign buyers to invest in america may temporarily boost the american economy but by allowing foreign buyers to purchase american real estate in large numbers the affordability for American middle-class citizens is rapidly making the american dream harder to reach especially for the younger generations.
Foreign investors are finding value outside of residential properties. Investors are buying small lots, commercial lots and farmland and driving land prices up and up. As a land investor this is not such a bad thing we all want our properties to go up in value.
Smart Land investors that purchase this land fast enough will find that they’ve made a smart investment.
It’s a love hate relationship for me. I feel so fortunate to be in this era of information at our fingertips. There is so much to learn and it moves so quickly that it’s hard to keep up sometimes; Let’s be honest – it’s impossible to keep up!! I have put together this simple video to help show – not just explain how I do it. I would love to hear your comments and feedback. Please click on the caption to start the simple instructions of how I do it!
Avoid these common pitfalls and save yourself the aggravation
Do your homework and understand what you can and can’t do with the property you are going to invest. Save yourself the frustration of purchasing a property you can not use as intended. Research the area and the property and avoid wasting time, money and ultimately spoiling your dreams of land investing.
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So you’ve found a parcel you want to buy. That’s awesome! First things first. Once you’ve decided this property is right for you then call the counties tax recorder or treasurers department where the property is located.
The simplest method is to google county recorder, Another excellent method is to google the county and GIS. Many times the info can be found right on the web. Other times you may need to call the county recorder and speak to someoone. Some counties are not so cooperative so try the County Tax Collector or Treasurer they won’t give you the name but often times if you tell them the owner’s name they will confirm that is the name they have in their system.
This valuable piece of wisdom will keep you from getting scammed. There are scammers online that will copy real listings verbatim and pose as the seller. They use a fake FaceBook or Ebay ID and fake escrow company and scam buyers of their hard earned money.
Know what you are getting into before you make that purchase. Confirm what is owed to the county tax collector. This is not a make or break scenario. It’s important to know how much your total investment will be at the end of the day.
Again, Google the county tax collector or tax treasurer in the county the property is located. Many times just by having the properties APN number you can look up this information online. However, I suggest you speak to someone directly at the treasurers office stating you are considering purchasing this property and would like to confirm total property taxes due before you make the purchase. This way you are getting the most recent information.
Important to note that if you do find out there are past due property taxes on the parcel to ask the seller who is responsible for payment. If the seller agrees to bring the taxes current then be sure to ask for proof of payment. You can also follow-up with the treasurer to confirm payment.
By researching property taxes before you commit to buy you can save hundreds of dollars and provide peace of mind knowing before you commit.
ZONING AND LAND USE
Avoid this common pitfall and save yourself the aggravation and frustration of purchasing a property you can not use as intended. Do your homework and avoid wasting time, money and ultimately spoiling your dreams of land investing.
Check the zoning and land use codes are in alignment with your building goals. Is it agricultural, residential, commercial, or industrial zoned? A perfect example, a friend of mine acquired a piece of property that he wanted to park his RV on and live there affordably and peacefully. He was so excited and settled in on the property with his RV. All is going along just fine then after a few months on the property he receives a citation from building and safety saying he must vacate due to violation of zoning laws. Failure to ask the questions can lead to disappointing outcomes down the line.
What if you planned on having horses and agricultural livestock. Well if the property is not zoned agricultural and only residential well your dream of having horses or livestock would be in violation. Don’t let that happen to you. Know the zoning and it’s allowed uses.
Do your due diligence! Here’s how: Look up the County Planning and Zoning Department and speak to someone who can confirm your intentions. Give them the APN number of the property you are investing. Ask them ‘What if’ questions. Have a list before your call. What uses are allowed? Are animals allowed? If so, what types of animals? Are there maximum number of houses, horses, livestock allowed? Is there a time limit to build? What is the minimum home size? Are there any set-backs? I think you get the picture.
#1: Is the property in a flood zone? Some county websites have GIS maps that show if property is in a flood zone. Using the APN number or owner information you can discover many important items using the GIS map. However, every counties GIS map offers different tools.
#2: Check if the area has any environmental clean up requirements. Call the county planner violations department to confirm there are no pending issues with the property. This is not typical for residential properties but still a good idea.
I hope you’ve found this series educational and increased your knowledge tool belt for future land investments. From time to time I offer special discounts to those on my PREFERRED BUYERS LIST. Keep watch and happy land scouting!
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