Some real estate agents and economists believe that the U.S. property market is an ideal investment choice for Australians. However, precautions must be taken in order for investors to enjoy a lucrative investment when buying property overseas. Investing in the U.S. real estate market is not a decision that should be taken lightly.
Reasons To Invest In the U.S. Property Market
Australian investors may be attracted to the U.S. real estate market because of low prices and an ample supply of properties. Soaring costs in cities across Australia often make it impossible for entry-level investors to maintain a portfolio that pays off.
Indeed, there are benefits of investing overseas that can be enjoyed by those willing to think more broadly and open up their options.
Low prices in major U.S. cities allow investors to purchase multiple properties for larger returns on investment. While property rates are low, rental rates are often high because of the large number of people looking for a place to live. Americans who can't afford to buy a home are lining up to rent suitable properties, so investors are able to enjoy the financial benefits of a steady rental income stream.
High rates of foreclosure in the U.S. also allow investors to purchase properties well below market values. Renovations can be done within one month to transform sub-par property aesthetics and attract high-quality tenants.
Use Caution When Investing Overseas
While there are advantages to investing in the U.S. real estate market, economists warn that Australian investors should do extensive research before purchasing a property overseas. Many investors have been duped into purchasing properties that have no potential and are unfit for tenants. Take caution and take steps to avoid this problem.
Some Australian companies that have established offices in the U.S. are able to guide investors through the purchase process. These businesses will help investors set up a bank account in the U.S. to facilitate the purchase and accept rent payments from tenants. Investors are given the opportunity to tour properties before making a purchase to ensure that there are no major issues that require costly repairs.
Investors are advised to avoid purchasing properties that they cannot first inspect. If making a trip to the U.S. is not possible, investors should at least select a representative to complete the tours on their behalf. Professional inspections can also help investors avoid the high cost of a bad real estate purchase.
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