“Acting cautiously, but not fearing the Donald Trump era, is the best path Latin American investors can take in these times of announcements and apparent uncertainty.” This is according to a report by PFS Realty , a real estate and franchise agency that for 15 years has advised more than 1,000 Latin Americans to invest in the United States in businesses that exceed a total of 400 million dollars.
For Gustavo Galvez, Colombian who founded and chairs PFS Realty, an entity that is responsible precisely for advising Hispanics in their investment plans, visas, property purchase, financing plans or establishment of residence in United States, it is important to keep in mind that behind a President are the legislative and judicial powers that will not allow the executive to make unilateral decisions that affect the growth of the country.
“America has a democratic system that prevails over the interests of any one person. No one will be able to put at risk the political and economic system of the country and that was demonstrated a few days ago with the decision of the Federal Court in Washington that overturned the ban signed by Trump to prevent the entry of citizens of seven countries.Galvez explained.
“So far the government has not taken any measures that we think will affect the real estate or investment market in the medium term. The different economic actors have so far received the new administration with a lot of optimism, which is reflected in the Dow Jones that exceeded 20,000 points, “he stressed.
Profitable destination
Among the main incentives for Latin American entrepreneurs to continue expanding their assets in United States There are the Interest of 5% per year that can be accessed by people who request loans or financing for their projects. In Colombia, for example, rates for 2017 range between 12% and 22% per year, which opens a gap of more than 50% between both offers.
Buying at competitive prices due to the high supply that exists in the real estate market in cities like Miami and receiving an income in dollars that at the exchange rate in pesos triples the initial amount, become other strong attractions for Latin American investors. Buying a $350,000 property and renting it out can add 5% per year ($17,500) to the owner’s cash flow.
Beyond the decisions made by the Trump administration in recent days, the United States will remain one of the safest and most profitable options to invest, says the PFS Realty report. “We are opening an era of a new American dream that has connotations of legality and security. The analysis that must be made at this time is that Latin Americans who come to the United States to undertake will be backed by a government that knows how to take care of its budgets,” said Gálvez.
According to the Hispanic Wealth Project out of San Diego The Latino community, in which Colombians are located, accounts for 69% of the growth in housing in Colombia. United States and is the only ethnic group that has increased this indicator consecutively for more than six years. At the end of 2015, Latin Americans bought 245,000 homes in the United States. Hispanics who owned 4.5 million properties in 2000 now own more than 7 million (67% more). Researchers predict that this community will increase its control over the housing market by $5.7 billion over the next decade.
PFS Realty agrees with the publication that the trend will continue in 2017 and the coming years. For Pew Research, the increase in new real estate investors goes hand in hand with the growth of the ‘US Hispanic’ which currently represents more than 18% of the total population of the United States (350 million). By 2060 this community will represent 30% of the inhabitants of the North American country.
What Colombian entrepreneurs buy
● According to PFS Realty “Colombian entrepreneurs buy on average houses, apartments and franchises between US $ 350,000 and US $ 500,000 to rent them and increase their capital in dollars. Gálvez assures that the majority of local investors are from Bogota (60%) who invest 60% of the capital to acquire real estate through 30-year mortgage loans.
● The Florida (22%), California (15%), Texas (10%) and New York (5%) are their favorite places to shop. “Miami It is the sixth most attractive city in the world to make investments and in recent years its demand has risen because architectural ‘jewels’ have been developed that identify contemporary adults very well. We are above Dubai and Hong Kong and on par with New York, London and Shanghai,” says the President.
● U.S. law states that with a minimum investment of US$ 100,000 foreigners obtain an E2 visa to live and work temporarily in the United States. If the investment exceeds US $ 500,000 they will be able to obtain US residency.
