Why Are Australians Investing In American Real Estate

Although, the overall American real estate market is slowly recovering from the 2008-2009 financial crisis, some markets are not just not recovering, but are getting worse, like: Houston, Chicago and Cleveland. While these marketplaces are an exception, many others are showing signals of a slow, but positive recovery. Lately, the suburbs in cities like Settle, Phoenix and Detroit have become a real hit, since the houses come with much affordable price tags. You can easily find houses in good suburb areas with three bedrooms at affordable prices. These examples show that the US real estate market is gaining popularity like never before, especially with foreign investors.

This may be the major reason why growing number of Australians are considering investing in the US real estate. The main question is why? Why are Australians interested in the US real estate? What are the advantages the American real estate market offers? Here are few reasons why the Australians are investing in the US real estate.

  • The American real estate market offers low entry point. For young investors with limited initial deposits and limited incomes, the US is a very popular market.
  • In order to buy a US real estate, you need to get a mortgage from the US bank. The interest rates are generally 1 to 3% lower when compared with the interest rates in Australia. This means monthly payments are smaller which is excellent.
  • The biggest advantage of investing in the US real estate is the fact that these investments are instantly cash-flow positive. This means that even if the US real estate market needs years to recover, the rental returns are still very respectable.
  • The prices in some markets are so low that there is nowhere to go but higher. The American real estate cannot get cheaper because the nowadays rates cover the cost of the roof, fittings, bricks, with the value of lend being of the rural acreage. There are almost no chances of the house values to get “worse”.
  • There are great chances for capital growth when investing in the US real estate. You need to do a little research in order to identify which states/cities are likely to recover first. There is a great potential for buying properties that are both high on capital growth and rental return (which is very rare in Australia).

Leave a Comments

Your email address will not be published. Required fields are marked *