The USA property market – The opportunity

The USA property market represents a unique opportunity due to a combination of factors:

• The collapsing of the value of the USA property market and a large amount of foreclosures resulting in very low capital requirements.  Property in the range of USD30,000 to USD100,000.
• Properties can now be bought significantly below replacement value
• Exceptionally low entry transaction costs (no stamp duty!)
• Rental demand and rate remaining strong leading to high yields of  20%+
• Best AUD/USD exchange rates since the AUD floated in 1983
• Low interest rates and the ability to secure US loans as an overseas investor further improve cash on cash returns

About Mark Taylor….

The USA property market – The opportunity

Buy property, don’t sell: How to grow wealth

By Chris Gray

The cost of buying and selling is too high. A commonly-made mistake by many property owners is getting excited about immediate profits and selling too hastily. A majority of these people eventually regret selling, rather than waiting it out for its worth to increase in value. It is far more beneficial when buying property to consider the possible growth in the long term.

Selling property incurs many unforeseen costs and taxes. Chances are, if you’re selling, you will be using the money to buy another property anyway. If you’ve bought the right investment in the first place, it doesn’t make much sense to sell.

I’ll put this into perspective: if you bought a property for $500k which eventually rose to $1m, what would occur if you sold it to buy another one?

With this property in mind, real estate agents fees would be about 2% which would equal $20,000. Then there are re-buying fees, which would equal $50,000 and then there’s capital gains tax too. Yes, having more debt is risky to start with, but as soon as the properties grow in value you can release equity. This gives you a buffer zone to guard against interest rate rises and other expenses and helps you grow your wealth.

Buy property, don’t sell: How to grow wealth

Capital Growth Strategy

By Stephen McClatchie

Capital gains are achieved when the value of your property increases over time compared to the original purchase price plus costs. If you were a smart property investor, one of the things that you would be doing is checking out the growth of property in your city of choice, then focus on buying in those areas that you believe will be rising faster than the national or city average. You will be looking to maximise your capital growth in the shortest possible timeframe. But these properties may not provide the highest yield – it can be a catch 22 of sorts. That’s why you need to have a strategy in place.

The return on your investment incorporates the capital growth along with the income derived from the rent. Generally – but not always if you go for a property with higher rent you are likely to get lower capital growth out of the property. It all depends what you will be looking for from your property. Do you have a couple of negatively geared properties? Would a property providing great cash-flow be the best next step? As you can see, knowing the numbers is an essential step to SMART investing, particularly as your cash flow and equity increases. They will tell you WHEN you will want to invest, and in WHAT. And as your potential for investing increases, you will start expanding your possibilities. In such cases, knowing the numbers becomes ever more essential. 

About Stephen McClatchie….

Capital Growth Strategy

My USA Property Journey – Buy Strategy

Thought I would share my USA property journey with you…  It ITHere are certainly a few nuances to buying in the USA!

So first of all the buy strategy:

1) 1st property; Take advantage of the ”1st home” loan (4.5%) for a property in Florida.  My logic is that we can get some capital growth potential whilst taking advantage of the low interest rates which should still ensure positive cash flow.  LVR 60%.  Looking for something in the $100k+range which should get us a solid house with a good standard of tenants

2) 2nd/3rd property in Memphis.  Minimum property value of $40k + which means properties > 1950s and in good condition, fully renovated. Positive cashflow properties on P&I loans which will mean pay off in 3 to 5 years depending if we can top up repayments.

About Mark Taylor….

My USA Property Journey – Buy Strategy

Success Insight December 2010 is now out!

The new issue of Success Insight is now out.

 http://www.keystosuccessclub.com/newsletter/2010/December2010

Let’s find out what’s in store in the Property section of Success Insight, December edition…

• The secrets of successful investment in “Off the Plan property” by Munro Cohen, MD of Whiterock Capital Partners
• Free Info pack outlining how you can successfully invest in the
  US property market as well as the opportunity to speak one on one with someone who has recently bought 8 properties in the US
• “How to avoid the 5 most common risks when buying real estate”  from our newest expert panel member, Michael Poynter from MCP Group
• Australian Property Market Forecast 2011 from our expert panel

http://www.keystosuccessclub.com/newsletter/2010/December2010

Enjoy!

About Mark Taylor….

Success Insight December 2010 is now out!