Market challenge – Bris-vegas v Kansas

The prospect of purchasing in the United States (US) property market is returning to the list of viable options for some Australian investors.

With purchase prices running rampant in many Australian locations and yields plummeting, the Trump effect is starting a slow burn that may bring a slither of confidence back into the market.

Crave recently hosted an event with InvestUSA founder, Matthew Stubbs.  During the evening, the pros and cons of investing in the US were discussed at length.  Outlined below is a summary of the key issues along with a baseline comparison of buying in Brisbane or Kansas City.

The upside

  • The United States is the largest economy in the world.
  • Rental demand has increased since 2009 (the Global Financial Crisis).
  • Opportunities for currency and market diversification.
  • Positive outlook for the US economy.

 The risks

  • Poor property management.
  • No trusted team on the ground if things go wrong.
  • Buying in bad neighborhoods and knowing the good v bad streets.
  • What if there is another crash?
  • Your investment property isn’t just in another part of Australia.

 Trump effect

  • Short-term stimulus to the economy.
  • There could be a move away from stringent mortgage underwriting to more normal lending (which will have both good and bad impacts).
  • Increasing interest rates and inflation.
  • Wild cards in the pipeline.

 Changing views for the multi-country investment model

  • Market has changed dramatically since the GFC.
  • Exchange rate risk.
  • It’s difficult to beat the cash flow of US properties.
  • There is the possible return of bank finance.
  • Can play a role in a well thought out investment plan.

Outlined below is an item for item comparison of two key markets – Brisbane, Australia and Kansas City in the US.

 

A more detailed review of the pros and cons of US investing is outlined in another blog titled Buying US property – fun or freaky.

Matthew has put a team of specialists together to support international investors entering the US market.  This includes an accountant, solicitor, property manager, builder, and banker.  Matthew’s team will source other specialists (plumbers etc) where required.  Matthew grew up on the Central Coast (NSW) and established a portfolio of Australian properties before moving to the US, so he really understands the requirements of Australian investors.

As an independent and unbiased advisory firm, Crave currently focuses on buying Australia-wide, however we are actively looking for good operators we trust world-wide.  We highly recommend the services of InvestUSA, and invite you to conduct your own investigations into their services if buying in the US is something you believe would be of interest.  Crave receives no commissions or referral payments from InvestUSA and has no corporate interest in the company.

 

Buy smarter = limitless ways to build lifetime income

Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property.  A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income. 

Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business.

Follow us on facebook.com/CravePropertyAdvisory for regular updates, or book in for a strategy session to discuss your property questions.

Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.

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