I often get asked this question and in all honesty they are completely different market places.
Blogger: Mark Rooney, Investinus Group
The US property market is more like 20,000 property markets in one, whereas the Australian property market is maybe 50 different property markets.
At the end of the day the basics are still the same, though and there are minor differences, but for today’s reading let’s focus on the most crucial one and that is the property management. This is the difference between success and failure in the USA. I cannot stress this enough. When I set out some 11 years ago now to buy property in the US, I was obviously aware that I would be half way across the world and likely not be able to jump on a plane to come and inspect every time there was an issue, therefore the importance of the team on the ground managing the property was paramount.
Hence the reason I spent so many years developing what I call the ‘Infrastructure’ first. Unfortunately, I have seen all too often Australians investing in Australian and US companies selling US property who they believe have developed this ‘Infrastructure’ first. They later find out that the property management or team on the ground whom they have been referred to (after paying huge joining fees to have access to these people) are not really interested in the Australian investor halfway across the world. It would seem to me that they miss the importance of the investor back in Australia and forget about trying to maximise greater return on investment by minimising maintenance costs etc.
All this said, it is not all bad news and the US property market offers exceptional once in a lifetime opportunity to invest. There will never be another opportunity in our life time to invest in property like this again. What I suggest is that you work with people who value you as an investor (I will discuss in another blog how to get them to value you) - people who try and understand your investment strategy and what you are trying to achieve.
When I set out to invest in a city in the US, I would sit with 10 to 15 property people there and ask them lots of questions about relationships, relationship between them and their partners, their parents, their friends their kids and so on. I was looking for issues that were going to become magnified later between them and me, after I purchased. Most of the Americans were a little shocked at this line of questioning, although I later found out they also were a little intrigued. In saying this I would leave them with one last statement, ‘Now when I go back to Australia, I will not be buying from you for at least 12 to 18 months’.
Many of them switched off there, but the smarter ones continued the relationship for the next 12 or 18 months, therefore building a relationship with me. I also knew that if they were willing to invest that much time into the relationship then it was less likely that they would be willing to let you lose on your investments either. In each location I invest and I have advised others to invest we use the same people we have built relationship with over many years to ensure everyone’s success. Hence we have steadily grown and delivered beyond our investor’s thoughts and ideas.
The best is yet to come!
About Mark Rooney
Mark first found out about the advantages in the U.S real estate market in February 2002, whilst on a business trip to Canada and the U.S.A. The initial contacts made were able to assist with learning and studying the market place and how an Australian can invest into the U.S market safely and also have assurance that a team there can protect the asset.
For the next 4 years Mark researched the U.S real estate market and looked for opportunities to build further relationships with people. Over the next few years Mark gained an understanding of the various cities and what investment outcomes they provided a foreign investor.
In 2009 Mark was asked to assist others with purchasing property in the U.S.A. This was the initial beginnings of Investinus Group, whose focus is ensuring that their clients have a safe and secure investment in U.S. real estate.
The group aims to build strong relationships with their clients and the people who work with them, suppliers, property managers, attorneys, accountants and developers.