International investors are a huge potential source of business for CRE. Foreign capital already represents over 20% of the total investment in U.S. commercial properties, to the tune of more than $100 billion last year. Certain real estate marketing techniques can help attract these buyers.
These buyers are primarily institutional funds originating in Canada, China, and Australia, with significant activity from the Asian Pacific as well. China alone has about 2.7 million high-net-worth individuals (earning $1.5 million plus), and the upper-middle class in China includes about 60 million people.
These international investors tend to favor American properties due to the relative stability of our markets and the increasingly transparent deal-making process. Despite this interest there are unique challenges to marketing to these buyers.
Identify and Differentiate BuyersIn planning the best strategy to reach potential international buyers, the first step is to identify and understand them. It can be helpful to categorize these investors according to whether they originate in Emerging or Developed markets. This makes a difference in how they approach investment.
Generally, buyers from emerging markets have more wealth and are comfortable with higher-priced transactions. They are more focused on capital appreciation than on yield, and will be most interested in properties in major cities. Buyers from developed markets are more concerned with yield and have more in common with U.S. buyers.
Understanding these basic (and admittedly broad) differences can help customize real estate marketing efforts to make them more effective. There are tools available to help identify potential investors and save the time it takes to collect that information. Brevitas creates communities of vetted investors based on interest and locale, so you can be sure that you’re targeting the right buyers.
Clear BarriersAttracting and holding the attention of international investors is impossible if your message can’t be understood. Ideally, materials should be in the native language of the client, but online information can be translated. Nearly as many people get their online information in Chinese (20.9%) as in English now (25.9), and users are adept at getting access to material that may have originated in a language they don’t speak. In creating material for an international audience, it’s important to avoid acronyms and colloquial language that may have no meaning outside the U.S. Another consideration is providing information on regulations and taxes that is accurate from the foreign viewpoint.
Local Language WebsiteOne of the first products you should develop is a website in the local language that is optimized for the dominant search engine in that market. These include Baidu in China or Yandex in Russia. The local marketing effort should also include paid online ads, which can include social media ads, banners, and property portals.
InteractionOnce initial contact has been made, follow-up is critical, and should be pursued through as many “touch points” as possible. These can include drip email, social media, phone calls, and any other channels that are used with domestic clients. It is often necessary to find “channel partners” in the international location who can direct information to their local client network.
The basics of international real estate marketing are the same as those for efforts closer to home. Know your audience, tailor the message, and keep in touch. It’s all on a larger scale, and there are cultural and regulatory differences, but at the end of the day, many foreign buyers are keen to invest in U.S. properties. Making contact is often the biggest trick.