Midyear state of affairs: A closer look at the country’s markets
With market conditions changing at varying degrees across the country, seven experts from Property Investment Profession...
There is still time for Australian investors to get their foot in the door of the US property market, according to House Buyers USA director Matthew Dunne.
Mr Dunne says that whilst big time investors are setting out to dominate the US property market, he believes there’s still time to grab a piece of the pie, although competition for ‘that bargain’ is becoming fierce.
“Properties in the States are heavily discounted, offer strong rental cash flow and high potential for capital growth. They also tend to be larger and newer, so more investors are taking notice,” Mr Dunne said.
“For example, in Atlanta, Georgia, prices are quickly rising due to the increase in sales and interest in the area. You can currently buy homes in some cases at 50 per cent of their previous high value.
“Interested investors, however, need to be quick as the real estate market is becoming institutionalised. The big hedge funds are buying up all across the country. We’re coming up against them more and more, they’re coming into the marketplace with billions of dollars and buying everything they can.
“Wall Street is buying in bulk for their clients. They plan to purchase now, rent them out and then put them back on the market in future years when prices have risen, in the meantime earning generous yields for their funds.
“Some US property promoters are telling investors they need elaborate company structures in certain states to avoid paying taxes. This is not encouraged and people should absolutely seek independent taxation advice."
Mr Dunne says that investors should also be wary of "inflated flipped properties".
“There are a lot of people targeting international investors, who might not know the difference between 'flipped properties' and 'inflated flipped properties'.
“They’re selling them at inflated prices and that’s something people can get caught out with, and is why House Buyers USA work off the business model that we do, to offer our clients the opportunity to buy bank direct or turnkey properties, which are already renovated,” Mr Dunne said.