It’s now just over a week after the election and uncertainty still hangs in the air. But for real estate investors, that might actually be a good thing…
Here’s where we are right now: the stock market is in record territory since Trump’s electoral victory. And yes, Trump’s stated policies of tax reform, trade agreement restructuring and infrastructure investment all bode well for the stock market and the American economy.
Specifically, a trade war with China could just as easily erupt from Trump’s proposed trade policies, sending the US and global markets into a tailspin. However, as we'll see in a minute, there’s an investment angle to China that, as we'll see in a minute, allows us to take great advantage of this uncertainty.
All that being said, with such unusual and lofty paper asset values, is the market the place to look for stability?
Who wants to buy in at 11:59 p.m., and then when the clock strikes midnight and prices go through the floor we all turn into pumpkins?
Most investors we speak with are not interested in taking the long elevator ride down to the ground floor…again. Once or twice in a lifetime is enough.
But what should smart investors do in this climate of uncertainty? Should you buy metal…or dirt?
Should you tag along with the international financiers’ and add more gold to your portfolio?
Maybe…but maybe not.
The big financial players make more on a 50-basis point move in gold prices than most investors will make in a lifetime. A little gold is good for your portfolio, but too much is, well, too much.
In most cases, the advantages of being heavy in gold (pun intended) are outweighed by its disadvantages:
- it's value is often subject to governmental policy and price manipulation
- gold pays you no rent
- you can’t add value to it
- it provides zero tax benefits
- you usually can’t leverage it
- you can’t grow anything on it
- you can’t eat it - except when you hold it too long - then you’re really eating it
Real estate, on the other hand, offers all of those advantages in one way or another.
And now for the really interesting China angle mentioned above…
Cash-rich Chinese investors, wary of China’s slowing GDP and teetering shadow financial system, are feeling very uncertain about the near term health of China’s economy. They’re looking for tangible investments with solid returns…who isn’t?
But with Chinese real estate prices through the roof, those investors are actively looking abroad for real estate deals. In fact, they’re buying lots and lots of houses, apartment buildings, strip malls and more; and not just in Sydney, London or New York City. Chinese investors are paying cash for real estate in the urban and suburban areas across the Americas, in Europe and Australia.
The world's biggest real estate frenzy is here and it’s coming to YOUR neighborhood.
That spells real opportunity to capture value and profit (not to mention higher rents) as the tsunami of demand for real estate from China gains momentum.
Be sure to speak with a trusted advisor who can help you take full advantage of this coming opportunity .... before everybody else does.