The US Real Estate Market May Be a Beneficiary of Brexit
The decision, made by UK citizens responding to former PM David Cameron’s referendum call, caused panic in world financial markets as it is believed that the UK will no longer have access to the EU’s single market. This loss of 500-M potential consumers within the market is of great concern to investors.
Many politicians and pundits believe the UK can negotiate terms with the EU to retain market access while blocking the international body’s immigration policies, many investors are now hedging against that possibility and looking for new opportunities to invest their money. The US real estate market is poised to benefit as a result.
High profile cities such as New York and San Francisco already have some significant foreign investment in real estate, and now they may receive even more along with other markets not yet tapped by investors.
The reason being is that for many years now, the London property market has been a haven for the globally wealthy to store their money in real estate. Now those same people are looking for an alternative to begin moving their funds over as London might becomes a less viable haven in a post-Brexit world.
The benefits for US real estate markets are multiple
- Large US metro centers are poised to receive large, fresh infusions of capital from investors looking for both residential and commercial real estate to invest in now.
- US real estate investors with holdings in office space, hotels, rentals, etc. will likely see a marked increase in value.
- Rental prices will inevitably begin climbing as well due to a new wave of foreign investors buying up US homes and turning them into rental properties.
- US REIT’s are primed to do well for their investors as their real estate holdings are exactly the kinds of property foreign investors are looking at right now.
- Brexit will accelerate commercial real estate prices as investors begin pouring their funds into these assets as a new place to park their capital.
- REIT’s will likely producing higher yields for such investors
For US-based real estate investor’s Brexit may provide an unexpected boost to holdings in both the long and short term. To fully capitalize on that possibility, it is important that you have proper asset protection in place, and are taking care of the many tax advantages allowed
The Heffernan Capital Management (http://heffcap.com/)team can help evaluate and structure legal entities to handle such matters promptly.