How does US real estate compare to Australia?
A studio in Sydney or an apartment block in the US? These are the kinds of US real estate opportunities that are available right now. As part of an investor club I get posted some amazing opportunities to invest in US property. A recent example was a 17 unit block on one title for US $300k! Not only was it extremely positively geared, there was the ability to strata title, or do a condo conversion as they call it over there, where significant profits could be made selling the units off individually.
This kind of money might get you a studio in one of the eastern capitals, or a 2 bedroom unit a bit further out of Australia’s major cities. And these properties are more than likely to be negatively geared meaning you’re dipping into your pocket for some time, hoping you’re gaining some capital growth. My dad often says ‘if it sounds too good to be true, it usually is’. And my experience of getting sucked into telemarketing deals or property development courses has made this cliche ring true. However, the US real estate market is a unique exemption, predominantly for 1 main reason – the GFC. Mass exodus from the mortgage market as a result of the sub-prime crisis along with historically low US property prices are creating the ideal climate for investing in US real estate – increasing rental demands and massively reduced property prices. This is something that we can’t get our head around in Australia. The US real estate market really is ‘too good to be true’ but as with any investment there are risks, some higher than others. Due diligence must be carried out and expert advice must be sought to ensure you capitalise on this amazing market.