If international money is watching the Brexit catastrophe unfold, then they know their once precious London real estate investments have taken a downturn.  So where is the next safe haven for international investors looking to park their capital?  Look no further than the Southern California and specifically the greater Los Angeles region. 

One of the most sudden impacts of Brexit was the effect on Treasury, and sending its yield to 1.43% (from 1.75%). The effect of that is pressure to the downside on mortgage rates (although there will be some delay in that).  Additionally, Britain's departure from the European Union could and will likely increase demand for US real estate in places like NYC, LA, SF, Orange County and San Diego.  

Today, Air Concierge manages an exhaustive list of single and multi family properties in 4 of those 5 locations (in addition to Palm Springs and Lake Tahoe).  Many of those properties are investor owned and are nearly doubling the long term rents previously generated prior to Air Concierge's oversight.

Now that the U.S. single and multi family market is better understood by foreign capital, the opportunity for ROI is clear, especially with the advent of the Airbnb model.  Investors can step into U.S. real estate,  make a play for the equity upside and cash flow immediately to the tune of 1.5 x-1.8x of what long term rentals provide, net of all fees. 94% of all Air Concierge properties start cash flowing within 5 days of going live online.   

Foreign investors who once made London their safe haven for excess wealth now have a real concern given the uncertainty over what the regulations and rules will be for foreign investment in a post-Brexit economy.  Reducing exposure to uncertainty is every investor's primary concern.  In addition, the US government has taken great strides to making international investment in US easier by lessening the tax burden.  One example, a non-US investor can own up to 10% of a REIT before federal taxes are incurred.  This essentially doubled the hurdle from previously, 5%.  In December of 2015, certain foreign pension funds are also exempt from taxes for their US property portfolio holdings. 

What does this all mean for investors considering the US Airbnb opportunity and those already invested?  It's absolutely reasonable to expect higher prices, for residential and commercial RE.  Current investors may also explore refinance as interest rates should be expected to move downward in light of Brexit.

About Air Concierge:

With a handful of Chinese and European institutional and private money in under its portfolio, Air Concierge has specialized in the day to day management and operations of the lucrative Airbnb (short term and vacation rental) opportunity.  Ask us how we align our foreign investors with US real estate and oversee the entire management arm on site and online.