Is the investment grass really greener in the US?

[muppet]

From Michael Yardney's February newsletter

Is the investment grass really greener in the US?

• Written By: George Raptis
• 17-02-2011
• Categorized in: Case Studies

Whilst attending the Sydney Property Expo a few weeks ago, I spoke with many investors who were excited about the fact that our dollar is almost at parity with the greenback in the United States of America.
The way they saw it was that overseas assets were ‘on sale’ for the first time in living memory.
In fact they could barely contain their enthusiasm as they told me about the bargain buys to be had in the American real estate market. Who could pass up a detached three-bedroom house for a tenth of the price that you would pay here in Australia?
“How much can I lose? Surely the prospect of being able to pay $20,000 to $40,000 cash for a property is something you would be interested in?” I was asked by one attendee.
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http://www.propertyupdate.com.au/articles/is-the-investment-grass-really-greener-in-the-us.html

[Dean@Massiveaction]

And the fact that Michael's company makes it's money by supplying Australian property in no way colours his judgment :-)

This article shows Michaels complete ignorance of the US property market, understandable as he has never researched it.

The funny thing is Aussies have put 700 Million USD into the US market in just the last 120 days and it is almost impossible to find someone who hasn't done well and who isn't going back to buy more. I suspect Australian property suppliers and buyers agents are hurting, hence this article.

[Michael Yardney]

And the fact that Michael's company makes it's money by supplying Australian property in no way colours his judgment :-)
.

Dean you know me better than that- don't you?

I know some areas of the USA are performing very well - in fact one of my business partners has just returned from a detailed property tour of the USA to understand exactly what's going on right now!

By the way...these areas are not the ones where you can buy property for $30,000

I also know that many marketers are taking advantage of inexperienced overseas investors selling them properties that no local would buy.

That's why I'm concerned that many Aussie investors will lose out as they did when others invested blindly overseas in the past.
Dean I'm not knocking you or your integrity. I know you too well for that.

I also know you've gone overseas and investigated the market and therefore you're giving informed advice - that's great for Kiwis.

And I know that you make money out of it would not colour your advice

By the way..some areas of the Australian property markets are doing well and our buyers agency is set for a record month of helping property investors. In fact new inquiries have been stronger than ever.

Michael Yardney
Metropole Property Strategists
Join 50,000 other property investors who subscribe to my newsletter

https://www.PropertyUpdate.com.au

[Dean@Massiveaction]

I also know that many marketers are taking advantage of inexperienced overseas investors selling them properties that no local would buy.

Absolutely agree Michael. Your article is a blanket avoid USA though, which surprised me :-)

There are a couple of real "stars" fleecing Aussies right now, very sad. ASIC is about to get on their case though!

Glad to hear Metropole doing well.

[Quenby]

I think the investment in real estate is really very profitable business in US but not all kinds of investment are so earning nature.But if we say the investment in real estate grass in definitely green here.

[sdiraexpert]

I couldn't agree with Dean more!

The time to accumulate wealth is now in US properties. Smart investors make investments when everyone is running away. The price points we are seeing in US properties are unheard of, and will never be seen again, in my humble opinion. The entire country is on sale and the economy is still a question mark, which enables investors more time to get in on the sale.

One other point to counter Michael's thought process on why us locals are not buying the properties. People like me are trying to buy as many properties as we can, but there is so much supply, and limited capital to go around.
Banks are not lending to investors, or those looking to acquire a second, third or 30th property. A lot of people with A+ credit are chomping at the bit to buy more properties but they have run through their initial capital and have to used a secondary market to find funding.

That is why we are not buying all the properties. We would if we could. I read where the US consumer has borrowed $7 for ever $1 it owns in savings. Most US citizens thought of their home as their biggest asset. They are now licking their wounds and it will take them a while to pay down their debt and be in a position to buy again.

Your time is now!

[Alliee]

In my opinion, we should always invest for long term capital growth, not the immediate gratification of a much smaller rental return that comes with positive cashflow real estate. We will never get rich from rental income (on which you pay tax), but we can create substantial wealth from property that generates strong, long term capital growth.

[Damap]

Alliee you have obviously never talked to an American investor with 100= homes paying them $600 a month and owned free and clear then. I would call sixty grand a month real wealth.

[donna]

We had a lot of activity on here a while back when the US property floggers were doing their best to convince anyone who'd listen to them that their turnkey deals were the best thing since sliced bread - of course all has gone quiet since and the US is heading for the fiscal cliff

[speedy gonzales]

Donna I don't know if investment in the USA has gone quite.....most likely all the companies trying to flog off cheap overpriced stuff have disappeared as people caught on to their tricks. You look at markets like Phoenix where prices of inventory have gone back to 2006 levels. Atlanta is heading the same way. There is simply no more "cheap" properties to flog off unless your investing in the hood. The biggest change has been Wall Street entering the real estate investment game. They are quite happy to get a 8% net return. They are turning up at foreclosure auctions with endless cheque books and bidding up prices. This is now happening in most US cities. So all of the spruikers who concentrated on markets where prices have now increased where they can no longer get appropriately priced inventory have no choice but to pick up and move on and probably concentrate on the small dying mid west cities.
What I have seen happening is the markets is being left to the more "above board" companies who operate ethically & with full disclosure. A lot of people felt they needed to have someone hold their hand through the process turned to all of these companies that all of a sudden had become US real estate experts overnight. The same sorts of companies who not that long ago were flogging off overpriced Gold Coast real estate. They operated with all the smokes & mirrors and made out like investing in the USA was a big mystery and they held the secret to your success and pay us a fee & we will tell you our secrets. Well the fact is that there is no mystery and all of the information they provided was available free if you knew where to look...plus they then pocketed a secret commission from the turn key company in the US on top.
To all potential investors...if you want someone to hold your hand and deal with someone you can trust then go to someone in the USA that is licensed by the applicable state authorities. Professionals Real Estate Group who operate in Australia & New Zealand also operate in the USA as Professionals Realty USA. EVERYTHING is fully disclosed to the buyer and all assistance is provided free of charge so why would you go through some of these USA expert companies who are not licensed in the USA to sell you real estate....they are just a middle man who collects a fee on your way through.

[Alex SC]

Speedy

There is a reason certain USA investors have been in business for years and still in business.

Donna I don't know if investment in the USA has gone quite.....most likely all the companies trying to flog off cheap overpriced stuff have disappeared as people caught on to their tricks. You look at markets like Phoenix where prices of inventory have gone back to 2006 levels. Atlanta is heading the same way. There is simply no more "cheap" properties to flog off unless your investing in the hood. The biggest change has been Wall Street entering the real estate investment game. They are quite happy to get a 8% net return. They are turning up at foreclosure auctions with endless cheque books and bidding up prices. This is now happening in most US cities. So all of the spruikers who concentrated on markets where prices have now increased where they can no longer get appropriately priced inventory have no choice but to pick up and move on and probably concentrate on the small dying mid west cities.
What I have seen happening is the markets is being left to the more "above board" companies who operate ethically & with full disclosure. A lot of people felt they needed to have someone hold their hand through the process turned to all of these companies that all of a sudden had become US real estate experts overnight. The same sorts of companies who not that long ago were flogging off overpriced Gold Coast real estate. They operated with all the smokes & mirrors and made out like investing in the USA was a big mystery and they held the secret to your success and pay us a fee & we will tell you our secrets. Well the fact is that there is no mystery and all of the information they provided was available free if you knew where to look...plus they then pocketed a secret commission from the turn key company in the US on top.
To all potential investors...if you want someone to hold your hand and deal with someone you can trust then go to someone in the USA that is licensed by the applicable state authorities. Professionals Real Estate Group who operate in Australia & New Zealand also operate in the USA as Professionals Realty USA. EVERYTHING is fully disclosed to the buyer and all assistance is provided free of charge so why would you go through some of these USA expert companies who are not licensed in the USA to sell you real estate....they are just a middle man who collects a fee on your way through.

[Moses Opondo]

The real estate industry in USA has been making great improvements, though National averages doesn't mean that buying in any location would guarantee a good return, therefore any serious investor needs to do more research on best places to invest in.
Generally though the grass is getting greener.