America property investment

L

lurcher

Registered User
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Just wondering, would America be a potenially good place to buy an investment property ? bearing in mind the difference between the euro & dollar,euro was worth $1.36 yesterday.I know there must be more to bear in mind than this one fact if one was to invest in American property but also bear inmind that this would be a long term investment (15yrs plus) & also let out over this period ?
Any feedback appreciated.
 
Also with the current slump in US property (with exception of Newyork area) would this add wait to the thought that the US may be a good location to purchase a buy to let property with a view to holding on to it as a longterm investment ? i already have two propertys in Ireland, one is my home where i live & the other is let out.My opinion is that the irish property is over valued (by about a third) & i don't fancy paying 300k & upwards for a three bed semi in Ireland.
Any thoughts or views wellcome !
 
The S&P/Case Shiller Index is the leading housing market index in the US. It's worth looking at the latest report.



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You may be able to get a bargain but the US looks a long way from bottoming out according to market reports, so prices may fall further. Also, if you do buy fund it source finance in the States because if sourcing funds from Ireland you will take a hit on the foreign exchange if the dollar strengthens, unless have ForEx forward contracts in place.
 
Anyone looking at investing in US property needs to also look at the additional fees and taxes that are payable on purchase, renting and disposal of real estate and the differences in these between states. eg look at how much realtors charge for selling property
 
While the residential market may not be the best option, why not consider the retail & office market in the US.

The Dollar is week and you may be able to capitalise on this. The currency is a major factor, however, as with most imarkets generally runs in a cycle.

Besides you will only be lending 80% or so therefore your actual currency exposure will really be on the 20% (downpayment by using €).

If you are interested in a Dollar (Canadian) based investment, why not consider the likes of Canada. Canada has not been affected by the USA housing crises, the rental yields are high and the property price inflation is healty and is also based on good principals- no property boom- just demand and supply and healthy economic growth.
 
Taking S&P's index into account and other indices like the US government's figures (OFHEO), the fact is that the US market is showing about 1% declines year on year? So it is not unlike our own market - basically flat overall but this masks more abrupt regional/local ups and downs.

There are many positives to the US market which the OP can be happy with - high rental demand, relatively high gross yields (eg. >6%), low cost per sq ft of property (e.g. can be down around €150 per sq ft compared to similar property costing €400 per sq ft here) and a strong economy.

There are of course negatives - high cost of prop mgt due to local property charges, community charges, insurance, letting and management fees; interest rates higher than the euro at present (>6%) etc.

So if you believe in the US economy, then the currency situation and the availability of good deals might make the timing of entry into the US market a shrewd move.
 


If anywhere near a hurricane area etc get two insurance quotes

1. As the property is
2. what would happen to insurance subsequently if hurricane came anywhere near

Also check state taxes for out of town residents.

Both of these can make property running costs very high ie Up to US$ 20,000 along the east coast in Florida
 
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