Own a slice of the US

Written on the 3 December 2010

OCT 2010

The head of an Australian company that has helped more than 200 investors buy properties in the US says a phenomenal, once in a lifetime window of opportunity has been presented in the wake of the US housing collapse.

According to My USA Property founder and CEO Andrew Allan, the US property market matched with a decade-high Australian dollar has created ‘exceptional’ conditions for Australian investors.

“It’s as if the financial conditions, the moon and planets have aligned. Australian investors have this huge opportunity to purchase positively geared, high yielding properties in the United States for less than the replacement cost,” he says.

“We won’t even buy into speculation about when the US property market will recover; right now the opportunity is about income-producing properties and any capital growth that may occur in the future should be considered a bonus.”

The burst of the US housing bubble is largely attributed as a major cause of the liquidity shortfall in the US banking system that led to the GFC after the Freddie Mac and Fannie Mae fiasco.

As a result real estate prices in the United States remain exceptionally low with the average three bedroom home hovering around the US$ 50,000 mark. Net rental returns generally range from 9 to 20 per cent.

My USA Property has sold real estate ranging from a free-standing home for US$12,000 to a 100-unit apartment building for US$900,000.

Allan says house prices satrt at US$500 but without undertaking proper due diligence a major risk is unwittingly inheriting huge tax debts owed on properties.

“I always say to people that we can find you three million headaches but within those are a handful of good investment products,” he says.

“Without consulting experts in the US property sector, investors face many dangers including long-term vacancies, buying in an area with a high rate of unemployment and not having the correct management, tax and insurance structures in place.

“That’s what companies like us specialise in. I don’t sit in my office surfing the net for properties.

We visit the US regularly, see the properties and conduct all the appropriate due diligence to make sure Australian investors aren’t buying a headache.”

Allan owns eight properties in the US and plans to increase his portfolio to 30 within a decade.

“There has been an exceptional response from the Australian market,” he says.

“A common investment strategy in Australia is to have three or four investment properties, then come retirement, sell one or two of them and live off the income from those remaining in your portfolio.

“The cost of doing this in Australia just doesn’t match up. In the current conditions you can buy ten properties in the US, all with a 10 per cent net rental return, for the price of one Australian house. It all comes down to the maths.


Latest News

SLATER & GORDON AND MAURICE BLACKBURN SHOWDOWN IN BELLAMY'S CLASS ACTION

FIERCE rivals Slater & Gordon (ASX: SGH) and Maurice Blackburn have secured funding for class actions against Bel...

WHY VIDEO IS A "GIVEN" FOR BUSINESS

IN TODAY's digital-driven world, video is king and if used right, it can push a company's brand and brand ...

BRAMBLES TUMBLES AFTER REDUCING GUIDANCE

BRAMBLES (ASX: BXB) will miss its first-half guidance due to cost pressures at its North America business.

The com...

VILLAGE ROADSHOW PARKS HURT BY DREAMWORLD TRAGEDY

QUEENSLAND visitors to Village Roadshow (ASX: VRL) theme parks have declined 12 per cent in the wake of four deaths a...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter