You’ve probably seen a lot of media post the GFC showing radically cheap USA Real Estate. At one point you could buy a house on eBay for a couple of hundred dollars or less! The rates of bank foreclosures are unprecedented as people who could never afford to own a home were given cheap loans that they couldn’t pay. Supply exceeded demand and as logical economic theory goes, house prices in many areas of the US literally plummeted, almost overnight.

There’s no doubt there are absolute bargains to be had in US Real Estate right now. But before jumping in feet first be sure to carry out the usual due diligence procedures you would normally do for buying investment property anywhere. Consider the reasons why some areas have dropped in value more than others. What are the economic drivers in that area? What are the big employers that will sustain a healthy population? Is there a university nearby that will ensure a constant supply of students for example? Unfortunately for those who have lost their homes, but a positive for those considering investing in US real estate, rental markets will be driven up as ex-owner occupiers become renters.There are cases of owner occupiers become renters of the property they just lost to the bank.

As an investor in US real estate you want to be sure the property is not only rentable, but also has the potential for capital gains.  See if you can find out last sale information – although real estate agents may not have this info or it may be treated as confidential, you can find this out through the local assessor’s office. Make sure your US real estate agent can give you sufficient information on the demographics of the areas so as to determine whether a bargain will end up making you money or become a money pit…