Tag Archives: foreign land investment

12.08.14
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2014 was a Stellar Year for Real Estate Sales to Foreign Investors

Foreign Land Investors

In the year to June, non-resident foreign buyers purchased an estimated US$7.97 billion worth of Florida real estate, according to a report from the National Association of Realtors (NAR) and Florida Realtors.  This compares to just US $6.43 billion in the same period a year earlier.  This represents a rise of US $1.5 billion or nearly a quarter (approximately 23%).

According to the NAR’s Profile of International Home Buyers in Florida 2014 report, about a third (32%) of these purchases were made by Canadian buyers.  A further 24% of total spending came from buyers in the Western Europe, particularly the UK, Germany and France.  Latin American and Caribbean investors were collectively close behind their Western European counterparts when it came to buying home, lots and acreage for sale in Florida, providing a further 23% of all foreign funds.  Many of these investors are resident in Brazil or Venezuela.  Asian buyers made up 10%, with China alone accounting for 6%.  As China represented just 1% of Florida real estate purchases by foreign buyers a few short years ago, it seems the country’s investors are rapidly taking a greater interest in Florida and in US markets in general.  Central Europe, the Middle East and Africa represented fairly small percentages of the total pot, 5%, 4% and 2% respectively.

Overall, these figures suggest that a full 10% of the total residential market in Florida was made up of sales to foreign buyers, up from 9% last year.  Furthermore, it shows the significant popularity of Florida with foreign buyers, as roughly 17% of the US $46.7 billion spent by foreigners on US properties went towards purchases in Florida.  Of all foreigners buying and holding one or more US properties, roughly a quarter are believed to own at least one unit in Florida.

In terms of the number of units purchased by this near US $8 billion pot of spending, it is estimated that international buyers snapped up around 26,500 individual properties in Florida.  This compares to just 22,600 in the same period a year earlier, representing growth of just over 17%.

According to the report: “The increase in international home buying activity was driven by the continued recovery of the world economy and the affordability of US properties.  Both US and Florida residential prices remain affordable to most international homebuyers.”  It was noted that the strong position of many currencies against the US dollar was a factor in the decision to purchase, making US properties more affordable as foreign buyers can get more for their money.

The report also went on to note that “international clients continued to purchase properties, lots and land for sale that are on the average above the mean price paid by domestic buyers.”

Compared to a national average of just 28%, over half of Florida real estate agents (52%) have international buyers among their list of clients.  However, this figure is down from last year’s 63%. Of these, almost one in five (19%) has at least six foreign clients, and 20% say that more than a quarter of their business comes from international buyers.

To work with Florida’s premier land sales firm, Gratia Group, call us today at (239) 333-2221.

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09.02.14
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Foreclosures Decline in Southwest Florida

LeeCollierFlorida

Foreclosure rates have continued to trend downward in Southwest Florida, but they remain among the highest in the U.S., a new report indicates making it a great time for buying Florida land at low prices.  The rate of foreclosures among all outstanding mortgages in Lee fell to 4.31 percent in June, from 7.65 percent a year earlier, per data provider CoreLogic’s recent report.  The foreclosure rate in Charlotte County, dropped to 5.17 percent, from 7.95 percent.

Despite the declines, Lee posted the 16th-highest foreclosure rate in the U.S., while Charlotte came in at 25th among more than 400 metro areas measured.  Florida land sale and exisiting home foreclosure rates were 5 percent in June, but that was down from 8.52 percent a year earlier. The state has dominated foreclosure rolls for much of the past five years.  At the same time, the U.S. rate declined to 1.70 percent, from 2.50 percent over the year.

Foreclosure rates throughout the region have fallen for much of the past year, as the real estate market has recovered and more homeowners have held on to their properties.  The foreclosure rate in Charlotte peaked at 12.23 percent in June 2011, according to CoreLogic.  Lee hit a high of 11.93 percent in February 2010.

The region’s mortgage delinquency rate, which measures mortgage loans that are at least 90 days past due and that could be headed to foreclosure, also has continued to improve.  In Charlotte, 7.61 percent of all mortgage loans were at least 90 days late in June, down from 11.39 percent in the same period in 2013.  In Lee, the delinquency rate fell to 8.74 percent, from 12.28 percent.  Statewide, 9.35 percent of mortgages were at least 90 days delinquent, off from 13.13 percent at the same time last year.  The U.S. rate was just 4.38 percent, a decline from 5.57 percent over the year.

To learn more about the SWFL real estate scene contact a member of The Gratia Group at (239) 333-2221.

08.18.14
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Determining Land Value

Land Values

The question of value is something that people selling and buying lots and acreage for sale struggle with.  What makes one piece of land more valuable than another?  You must consider this question: is the land a better value because it has more features, or is it a better value because it’s cheaper?  Some additional questions and considerations about property value should be: is this parcel more valuable because it’s closer to a city, or is this other property better because it has a beautiful view?  What if a piece of land has neither of these things, but it is close to land your family already owns?

 

The simplest explanation of the market value of a home site is that it is worth whatever people are willing to pay.  If someone is willing to pay $10,000 for a piece of property, that property is worth $10,000 and it is assumed that all properties around the first parcel are also worth around $10,000.  A few months later, a property several miles away may sell for $5,000.  The parcels between these properties are re-valued at $7,500, between the two prices.  This system of basing land values on nearby, comparable sales is something that real estate agents frequently use to place a value on a piece of land.  But this is really little more than an educated guess.

 

Local governments also involve themselves with property values.  They look at the market value of the property based on the last time it sold or on comparable sales in the area.  They then use that market value to come up with an assessed value.  The assessed value is often a percentage of the full market value.  This assessed value is what the county uses to determine how much they will charge in property taxes on that piece of property.  Sometimes the county looks at the market values every year and adjusts the assessed value accordingly, and sometimes they will only re-evaluate a property when it sells.  The assessed value might lag far behind rapidly changing market values an area.

 

When you are looking to buy a piece of property, it is good to look at all these types of value: market value, assessed value and comparable sales.  They can all be important tools for figuring out what a piece of land is worth. But it is even more important to look at what the land will be worth to you, personally.  Finding a piece of land that you will use and enjoy is much more important than looking at a particular price range.

 

To find the perfect piece of land contact a member of the Gratia Group Land Sales Team at (239) 333-2221.

 

 

 

 

 

08.04.14
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Foreign Buyers Competing in U.S. Housing Market

As analysts, industry participants, and policymakers struggle to boost homeownership among Americans, foreign investors activity in the U.S. housing market remains strong.

According to a profile of international home buying activity released by the National Association of Realtors (NAR), total international home sales were estimated at $92.2 billion from April 2013 through March 2014, up from the previous period’s level of $68.2 billion.

Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future.

Approximately 65 percent of purchases by foreign investors over the year involved a single-family home, with 42 percent used as a primary residence.  Because non-residents are limited to six-month stays in the country, most buyers use their properties for vacation or rental purposes or as an investment, NAR says.

While interest in U.S. housing spans the globe, NAR reports the greatest amount of activity came from buyers in Canada, China, Mexico, India, and the United Kingdom, which together accounted for nearly 54 percent of all reported international transactions last year.  Canada held on to the largest share of purchases at 19 percent, while China took the lead in dollar volume, purchasing an estimated $22 billion.

Four states, Florida, California, Arizona, and Texas, comprised 55 percent of total reported purchases, with Florida staying on top at 23 percent.  California followed at 14 percent, followed by Texas and Arizona at 12 percent and 6 percent, respectively.

According to the group, among foreign investors and buyers, Europeans last year tended to flock toward the warmer climates of Florida and Arizona, while Asian buyers were drawn to the West Coast.  Buyers from all countries showed greater preference toward areas where there were already concentrations of people of their own nationality.

NAR also found that nearly 60 percent of reported international sales were all cash, nearly double that of domestic purchases. “Mortgage financing tends to be a major problem for international clients due to a lack of a U.S. based credit history, lack of a Social Security number, difficulties in documenting mortgage requirements and financial profiles that differ from those normally received by financial institutions from domestic residents,” the association explained.

 

07.14.14
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What Chinese Investors can Expect When Purchasing US Real Estate

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It’s no surprise that Chinese developers and investors are turning to the U.S. market.  Alongside Canada, China has been the fastest-growing source of international clients for members of the National Association of Realtors, according to the group’s latest Profile of International Buying Activity.

When a Chinese investor wants to buy in the US, it is a smart decision to team up with an American firm, such as The Gratia Group, because the latter have the land, the expertise, or both.  Purchasing land in a foreign country can be a complicated process, but creating a solid partnership can be beneficial to all parties involved.

Even though investments within China can be lucrative, Chinese investors still prefer to buy in the US, because they see the U.S. market as more transparent and mature than the Chinese market.  There is high potential for appreciation, which makes buying investment property in the US  a smart decision for Chinese buyers.

In China, the system doesn’t protect junior partners the way it does in the United States, where everything is spelled out in black and white.  Because of these legal protections, Chinese developers end up getting better peace of mind when purchasing investment property in the US.

As much as Chinese investors hanker after American and other western countries’ real estate, there is a hitch.  According to Chinese law, Chinese nationals are not allowed to take more than $50,000 out of China each year.  Chinese investors who want to take more money out of the country must apply for approvals from the government.

The Gratia Group prides itself on its knowledge on international land and real estate sales.  Call us today at 239-333-2221 to speak with a member of our team!

 

07.07.14
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The Gratia Group Featured Lot Package of the Week- Freshwater Canal Living in South Cape Coral

1027 SW 15TH PL CAPE CORAL FL 33991Investors or home builders looking for Florida land for sale, will love the Gratia Group Featured Property of the Week, a beautiful lot located in South Cape Coral.  This lot, listed for only $10,900 is situated on a freshwater canal and will meet all your boating, fishing and water sport needs!  Located in the highly desirable Southwest Cape Coral, land is beginning to become scarce, this Featured Lot is sure to sell quickly!   1027 SW 15th Place in Cape Coral will make a perfect addition to any investment portfolio or is a beautiful lot to build your Florida dream home.

Own a piece of tropical paradise when you purchase this lot.  Located just minutes from white sand beaches and the Gulf of Mexico, this parcel epitomizes “Florida Living.”  To learn more about this beautiful Cape Coral lot for sale or other lots available throughout Southwest Florida, contact the region’s land sale expert, Gratia Group at (239) 333-2221.

06.09.14
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Two Great NE Cape Lots: The Gratia Group Lot Package of the Week

NW14Gratia Group is proud to present a newly listed Featured Lot Package of the Week.  The Featured Package is a wonderful opportunity for investors looking to cash in on a piece of the lucrative NW Cape Coral real estate market.  The two lots are located at:

825 NE 23RD ST CAPE CORAL FL 33909
1708 NE 14TH ST CAPE CORAL FL 33909

 

Listed at $10,800 & $11,200 respectively, these lots must sell together.  NW Cape Coral freshwater canal lots are hard to come by, so these lots are expected to close quickly.

Come invest in one of the hottest areas of Florida, Lee County.  The region is best known for world-class fishing, beaches and a warm sunny tropical lifestyle.  Cape Coral is a large family oriented community just minutes away from Fort Myers that offers beautiful parks and a wonderful school system.

To learn more about the Gratia Group Featured Lot of the Week contact a member of the Gratia Group Land Sales Team at (239) 333-2221.

 

05.05.14
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Why you Should Invest in Land!

Finding land to invest in isn’t a tough task to complete.  It’s actually quite simple.  You locate a plot of land, negotiate and make an offer, but when working through the land sales process you should employ a great deal of due diligence.

When you decide that purchasing land in Florida for investment purposes id for you, you should begin with an end in mind.  Consider if you want to invest in a residential or a commercial plot of land.  Then, verify the zoning on lot and see if any permits will be required.  Also, check traffic counts and planned road improvements for the area where your lot is located.  You don’t want to be surprised in the future when a six land highway is built next to your lot and the value falls drastically.  Also, keep in mind the cost of water and septic and verify that these utilities are already present.

One of the greatest rules in locating the perfect investment land is to never assume.  A piece of land could be great to the eye with a perfect location (perhaps on the waterfront or a golf course), but you need to ensure that it is suitable to build on.

Talking to local builders and the City Planning Board is a wonderful idea if you are planning on making a land investment purchase.  Both of these groups will be able to give you insight into future development in your area and steer you in the way of possible buyers for your land investment.

There are many advantages to investing in land including:

  • Land is a stable investment with a fixed value
  • Land is safer than stocks and produces higher returns
  • Land is a tangible investment
  • Land creates long term returns
  • As land becomes scarce in an area its value increases
  • Raw land is less expensive than developed land
  • The property taxes and maintenance on raw land is less than developed land

To learn more about making a land investment in sunny Southwest Florida contact a member of the Gratia Group Land Sales Team at (239) 333-2221.

 

04.07.14
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Purchasing Land for Long-Term Investment

Vacant land can be a great alternative investment to other risky investment scenarios such as stocks and bonds.  For investors that purchase land as a long-term investment, buying land in a growing area is as vital as the investment land itself.

Studying the direction of growth of a city or town highlights areas that have become populated over a specific timeframe and where this activity has been focused.  This information is beneficial to landowners and potential land investors for a multitude of reasons.

Successful long-term land investors are picky when it comes to where they purchase real estate for investors.  They study area growth and development closely.  The more developed an area becomes, the more profitable and desirable their property will be.  Highly developed areas attract more interest, whether it is for developing businesses or residential neighborhoods.

Eventually, businesses and neighborhoods will expand throughout the majority of the town center and land for sale will be scarce.  Due to its popular location and scarcity, land that remains vacant throughout the growth of an area will become more valuable than it was in previous years.  This increases potential profit if and when a long-term investor sells creating a potential for high return on their original investment on the land.

To learn more about long term land investing, contact a member of the Gratia Group Land Investment Team at (239) 333-2221.

 

 

 

 

 

03.17.14
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Gratia Group Featured Home Site of the Week: 1422 Mohawk Pkwy, Cape Coral, FL

GG-Mohawk

The Gratia Group Featured Home Site of the Week is perfect for boat enthusiasts.  This beautiful lot located at 1433 Mohawk Parkway in Cape Coral, FL is located directly on a canal with Gulf of Mexico access.  Save time and money when you purchase this lot as it includes an existing seawall.  Just build your dock and bring your boat!

Listed at only $81,000, this lot is generously priced for the popular southwest area of Cape Coral.  Lots for sale in Cape Coral’s southwest region are becoming increasingly difficult to locate, so this lot is sure to sell fast.  The area is known for its family oriented feel and is located close to the public library, Cape Coral Yacht Club, shopping and nightlife.

To learn more about the Gratia Group Featured Home Site of the Week or any of of other lots for sale contact an expert member of the Gratia Group land sales team at (239) 333-2221.