Why Invest In the USA?

We have noticed over the past couple of months that an increasing number of our investor clients are choosing our USA investment locations over the UK. Why?

Ok, so brochures showing pristine, residential condos, set in tropical gardens, look more attractive during the rainy days of February in the UK. I know I get excited when perusing the latest portfolios from the States! However, it is not just because of the gorgeous, sun-kissed photos.

It is because of the figures. Put simply, the figures in USA property investment work! They work well and they definitely give you more for your money.

We have lots of information about the USA property investment market on our website, along with individual location and strategy guides. In this article we shall cover all the most relevant points. By the end, I am sure you will be as excited as I am about investing in the USA and keen to learn more.

If you already know the basics and want to skip straight to the details, then you can head straight to our USA property investment pages and our Smart Guides download page. Alternatively, feel welcome to give us a call for a one-to-one chat on 01273 447 300.

Why invest in the USA?

For many years, the USA has been a popular investment destination for holiday homes. However, for reasons we shall explain in this article, America is fast becoming the number one location for serious property investors seeking extraordinarily-high yields and returns.

Here are the eight most important reasons why the USA is today's hot investment topic.

1. It is a mature, ‘first world' market, with first-class communications, finance and property sectors and a wonderfully entrepreneurial approach to business. This sets the USA above emerging markets, such as China and India, where risk is higher.

2. The USA is an English-speaking nation, which makes all communication clear and simple throughout the whole process.

3. The legal system is clear, easy to understand and fully accepted. Registration of property is also effective and you can insure against defects in title. This is not necessarily true in less well-developed countries.

4. The USA is an enormous country, with over 300 million people and a gross domestic product (GDP) of $14 trillion - the highest in the world and representing almost a quarter of the whole world's wealth creation. This expands your property investment opportunities!

5. The laws and customs make it easy to buy and sell, quickly and smoothly, often in just one day. This opens up opportunities for short-term profits.

6. It is easy to visit for holiday or business and you don't have to worry about the language, sanitation, or quality of food and accommodation. Plus, you can charge your travel expenses against your USA investment income!

7. The tax regime in the US is generous to business owners, with lower tax rates and greater allowable expenses than in the UK.

8. The USA is a high-reward, low-risk property investment destination!

Why invest now in the USA?

In our view, today's market conditions in the USA present a ‘once in a generation' opportunity for investors who want to build capital as fast as possible, generate high levels of income and create exceptional capital growth.

Market cycle:

Property prices have roughly halved since the 2006 peak. Property which was once overpriced is now incredibly cheap! The price crash is now levelling off in some areas, which means that time is of the essence and investors who buy now can expect the greatest capital growth over the next few years.

Foreclosures:

The USA property crash happened because mortgages were given to sub-prime borrowers who couldn't afford repayments when interest rates rose. In 2009, 2.8 million homeowners filed for foreclosure (equivalent of bank repossession in the UK).

In 2010, a foreclosure furore spread across the States when banks were accused of "robo-signing" away too many foreclosures. This means there is still foreclosure property available to investors at rock-bottom prices (around 70% below peak pricing and 30% below current market value), but this window of opportunity will start to close very soon.

Government incentives:

The USA has a scheme for low income earners who would not normally qualify for a mortgage loan. This program is Government-backed, administered by the Federal Housing Authority (FHA) and enables qualifying parties to buy their own home.

Additionally, the US Government provides a Section 8 Federal Assistance program which gives financial assistance to working families (similar to housing benefit in the UK) - typically between 60% and 100% of monthly rental payments.

For the investor, this means US Government-supported exit strategies at a substantial profit (when selling back into the community) and Government-supported rental income in the meantime.

High yields:

Rental yields in the USA are, quite frankly, astounding! In the UK, gross rental yields typically range from 4% or 5% (for houses in London), up to 8% or 9% (for flats in the north of England). That's if you are lucky!

In the USA, we have locations and strategies which give you up to 22% NET in rental yields. That's AFTER any monthly charges on your investment property (city tax, HOA fees and management fees).

Exchange rate:

Every decade from 1960 onwards (with the exception of the one ending 2010), has seen a fall in the UK / USA exchange rate. Historical factors indicate the downward pressure on the £ GBP will resume sometime soon, which means investors who invest now also take full advantage of the exchange rate cycle.

Local factors:

There are many regional variations and factors which offer fantastic property investment opportunities in the USA. We have carefully researched and located the areas which offer the most profitable combinations of unique factors.

We have professional, strategic partners in our chosen USA investment locations. Our partners have been selected for their expertise, experience and strong relationships with all the professionals you need to ensure your USA property investments run smoothly from end-to-end.

Profitable property investment strategies

So now you know why to invest in the USA, it is time to find out how.

Successful property investment can only be measured in terms of profit - short, medium and long term. We have created three bespoke, powerful, investment strategies which take full advantage of the market conditions overall AND the unique factors in each location.

Strategy one is Maximum Profits, offering short-term cash profits with no long-term commitment. Target number for Maximum Profits? An astonishing 30% to 50% return on your investment in just 12 months! Location for Maximum Profits? Memphis, Tennessee.

Strategy two is Maximum Growth, which provides far-higher-than-average capital growth. This strategy can give you an amazing 100% to 300% return on your investment in 3 to 5 years! Location for Maximum Growth? Florida.

Strategy three is Maximum Income, providing the highest possible rental income from your property investment. How high is high? How about a massive 22%! Location for Maximum Income? Detroit, Michigan and Buffalo, Western New York.

If there's only one thing you need to know, it's this ...

There is, of course, far more to property investment in the USA than we have covered here. I will be expanding on the USA property market, optimum investment strategies and our chosen investment locations over the coming months.

However, if you can't wait, then head straight to our USA property investment pages and our Smart Guides download page. Alternatively, feel welcome to give us a call for a one-to-one chat on 01273 447 300.

As for the one thing you really need to know - it's this. All our US property investments are fully-managed, end-to-end, armchair investments. We and our US partners look after everything for you, so all you have to do is sit back and enjoy the process!

Live with Abundance

Rod Thomas FCA  

Posted in USA Property

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