We all know that real estate investments are all about location. The market you choose to pursue makes an immense difference in an asset’s profitability, success and ROI.
It’s no secret that choosing a strategic market is a primary consideration for international investors. But, that can be easier said than done. Keeping up with the latest U.S. market data requires a lot of work and up-to-the-minute research…especially in 2021.
Foreign investing strategies in 2021
As a whole the U.S. real estate market is experiencing unprecedented activity as new trends emerge from the pandemic.
The traditional demands and sales cycles aren’t as predictable as they were before 2020. Instead, investors need to inform their decisions with cutting-edge data and market predictions.
Meanwhile, the U.S. market is primed for buying right now. This year is expected to be a strong period for originations as interest rates are historically low and property values are on the rise.
By the end of this year home prices are expected to balance out. However, certain markets will go above and beyond the national average. That’s where investors want to focus.
That means looking at what markets are out-performing expectations and building momentum for more growth in the future. Milo has compiled the latest housing market news and U.S. real estate trends to identify the metros with the most potential.
Here are the 5 U.S. markets that are offering foreigners the best opportunities for residential real estate investments:
Texas is one of the nation’s top markets for international investors, representing $5.6 billion in international transactions. It’s no surprise that Austin takes first place as 2021’s hottest housing market in the United States.
Austin’s lively metropolitan network and premier cityscape attract and retain wealthy residents.
Real estate analysts and economists expect Austin’s real estate market to be the best performing metro in the entire U.S. market this year.
Austin delivers all of the tenant demands that are prevalent in 2021: a sunny climate, job opportunities, affordable metropolitan scenes, diverse amenities, and large suburban living spaces.
Texas is a leading location in the American Sunbelt region for business and commerce. Huge companies like Tesla and Apple have locations in the state, driving rental demand for professionals looking for career opportunities.
International buyers should know that right now, many residents from California and other popular states are looking for real estate in Austin because of its affordability and value. Now that more people can work from home, U.S. renters are looking for more land -which Austin has plenty of.
In the last ten years, Austin’s property values have more than doubled, rising 15.0% since 2020. In 2020, home sale volumes broke the record with 40,165 properties sold. Vacancy rates for Austin’s rentals vary across the city, ranging from 6% and 12%. Occupancy in March 2021 was 89%.
Residential investments in Austin have immense potential for generating rental income.
In 2019, Arizona attracted 5% of all international buyers. 14% of international buyers from Canada and 7% of buyers from Mexico chose investment properties in Arizona.
Phoenix is rated as 2021’s second strongest residential market in the U.S.
Right now, Phoenix’s housing demand is higher than ever. Meanwhile, supply is incredibly low. This combination is hiking up the competition amongst rental tenants.
Phoenix meets all of today’s lifestyle needs that are propelling the U.S. market. A great climate, outdoor access, professional opportunities, metro access, and amenities are driving demand towards Phoenix. Homeowners from the West Coast are looking to Phoenix as their next home.
International buyers should know that Phoenix has immense room for growth. There is plenty of open land, so it’s possible to buy empty plots for new development projects. Rent rates in Phoenix rose 6% year-over-year in 2020. The vacancy rate in Phoenix is roughly 6% in 2021.
As an Arizona hotspot, Phoenix is a promising city for investment in 2021 and beyond.
Nashville is rated 2021’s third-best housing market in the United States.
Unlike the other sunny destinations, it’s not Nashville’s climate that is drawing so much attention. It’s the culture, nightlife, and metropolitan amenities. Access to higher-level education paired with professional opportunities is attracting residents to Nashville.
International buyers should know that Nashville offers property owners amazing tax benefits. It’s one of the best places to invest because Tennessee does not charge a state income tax and the city boasts low tax burdens. This is something that attracts rental residents, as well.
Right now, Nashville neighborhoods are undergoing redevelopment as the local economy continues to grow.
Florida has long been a favorite investment hub for international real estate buyers. In 2019, 20% of all foreign buyers purchased properties in Florida. 42% of buyers from Canada chose Florida.
Tampa is the fourth hottest housing market in the U.S. in 2021.
As residents leave coastal, high-priced cities for suburban neighborhoods, affordability, and more space, they’re choosing Tampa as their next destination. Tampa’s locations makes it an attractive option for buyers that still want mobility and access into Florida’s bigger metros.
International buyers should know that Tampa market has been expanding for the last 5 years. The population is growing and property values are increasing. In 2020, Tampa’s vacancy rate was 7.3%. In 2020, the average rent rate increased 4% year-over-year. Nearly half of Tampa’s market is composed of renter-occupied households.
Georgia has been gaining momentum with international investors in the past few years. In 2019, the state accounted for 3% of foreign investor activity.
In 2021, Atlanta is rated the fifth-best housing market in the U.S.
International buyers should know that Atlanta offers affordable living and low tax rates. The real estate market here is known to be less volatile that other popular markets in the U.S. In the past 20 years, Atlanta’s population has almost doubled and it’s still growing. Residents are attracted to the great weather, city culture, and access to land.
Rent rates in Atlanta have increased by 3% in the last year, with 57% of real estate being renter-occupied. Atlanta’s vacancy rate in 2021 is 5.8%.
Honorable Mention: Keep your Eyes on these 5 Metros
While these metros didn’t make the top 5 list of predicted out-performers, these markets should be on your radar.
- Denver, Colorado.
- Dallas, Texas.
- Washington, D.C.
- Riverside, California.
- Las Vegas, Nevada.
How Milo Can Help International Buyers Fund their Investment
No matter where your investment goals take you, Milo can help with funding. We never limit our clients to focus on a few typical markets which is why Milo offers services for properties in any state. Whether it’s Texas, Florida, Georgia, California, or any of the other 46 states, Milo is always ready to consider your diverse market needs.
We know that the traditional investment process can make it incredibly difficult for international investors to purchase properties in the United States.
There are too many hoops to jump through and the process is known for being long, which doesn’t allow for the fast momentum needed in today’s hot housing market. As such, many foreign investors opt to pay fully in cash, which isn’t always the best option. At Milo, we understand your needs- and we’re helping you find a better solution.
Choosing Milo as your trusted lender sets you up for an easier, more comfortable, and less demanding financing process.
Visit our website to learn more about how Milo’s digital bank solution is reimagining the residential investment model. Already ready to start? Click here to view our rates, or here to get pre-approved.