January 22, 2021

Cross-border Investments In The Real Estate Industry Of The United States Of America

If you haven’t noticed yet, as a real estate investor eying the current market trend, you will see the decline in cross-border investments. This is in line with what we are currently going through as a country. The ongoing pandemic has affected a variety of sectors, including the real estate industry. It isn’t visibly significant since the industry is thriving; however, it would help strengthen and recover our economic presence.

Capital investments in commercial properties were growing throughout the years yet have been put to a stop due to the current situation. As you may have noticed, commercial properties have gone frozen, mainly if they aren’t producing necessities for their people. Therefore, with businesses taking advantage of the virtual realm, cross-border investments have gone astray.

We must also keep in mind that even if fewer investors are coming in, we have almost the same amount of businesses that refuse to expand outside our borders. Making the cash flow from the economic standpoint stagnant and losing more than what was initially invested.

U.S. investment in properties over the years have totaled $18.6 billion in the first half of 2019-2020. An 18% decline is seen through the course of the second half of this year.

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However, even with regards to the slow progress of the economic strengthening showcased in the US’s economic recovery. The cash flow and circulation of investments still show promise. This is why the majority of countries are even considering Cross-border investments to expand their respective businesses further. The significant part about this for the real estate industry is that they are slowly shifting towards maintaining a balance between buyers and sellers compared to the buyers taking full control early this year.

Other countries share the same sentiment regarding Cross-border investments and are related and partnered with the US. We have Canada and the United Kingdom as pivotal examples. Since the countries mentioned above are across the borders, their partnerships and investments are shared within the three countries’ collaboration, strengthening their economic standpoint amidst the ongoing pandemic.

Even with the slowdown of how the flow of investments has gone over the first quarter, other factors serve as an assistive measure to keep the market afloat.

Emergence Of Trends and Challenges

Despite the number of obstructions and losses in international real estate investments, the current trend is still about global markets. No matter what the struggle has been in the country, there are still countries like China, Bangkok, Thailand, and Singapore that have shown great interest in investing—making cross-border investments feasible.

After almost a decade of expansion in the real estate industry, the region is currently facing some significant challenges that could affect this boom. In other news, we have focused on the plunge of interest rates and have focused on refinancing our mortgages; the truth is interest rates are slowly rising, and the economy is getting back on its feet. This shows signs that foreign investors and cross-border investments are going to control and dictate the industry.

There is no certainty to such a claim; however, it would be of great assistance to us as real estate investors to keep an eye on the trend.

Blockchain As A Tool Of Transparency

One of the tools that might help address issues when we talk about transparency and see the potential in cross-border investments through real estate investors’ eyes is blockchain. Blockchain technology is a diverse and well maintained peer-to-peer platform featuring public and private ledgers in the real estate industry. It is a tool that will process transactions that are recorded and cannot be edited, copied, deleted, or forged.

Cross-border expansions and investments will still vary from the investors willing to partake in the exchange and utilize such a tool. As a tool, Blockchain can help bring a transparent approach and, in return, create trust between the parties facilitating international investments. We aren’t all as confident in trusting investments from foreign countries, let alone across borders. The tool omits this hindrance and will provide an added factor and indicator of trust amongst parties. 

Changes Are Evident In The Core Market

Investing outside the norm or what is considered acceptable in the spectrum would fall into the hands of cross-border investments. As real estate investors, investing in properties beyond your reach shows a different promise and will showcase itself as the core market in the real estate industry.

You may ask why so. It’s because cross-border investments will seem like one of the most sought after options since most commercial and residential properties within the country are not meeting the demand as we would want and expect it to be. Therefore why not venture within the industry and explore options that are within reach.

With the current trend, we can safely assume that cross-border investing may seem like a risk; however, it does appeal to be a risk worth taking. Checking all viable options that a real estate investor may consider, it may be significantly apparent that foreign investors are making a comeback. There may be countries that are hesitant to allow such, yet there are countries that do. The relationships built through the real estate industry will enable you to have the leniency to explore further the options mentioned above.

Then again, you must also go through studies that focus on the trend to envision where we are currently standing economically and take action after reviewing such. Do not fully invest in something that you have no idea about. Rather know what you would get into and work from there.

We are real estate investors; we can do the needed research to support our claim and assist our choices.

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Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is intended as legal or financial advice.