Foreclosures Plus Employment Equals A Boost To The USA Property Investment Market

buy to let opportunities in the USA The USA property investment market is currently offering fantastic opportunities for Buy To Let investors. Soaring foreclosures are boosting the demand for rental property and increasing employment is enabling solo tenancy for young adults.

This means clever investors can purchase foreclosure properties very cheaply and then let to a high demand rental market. Even better, US property investment through Axis is a completely hands off, armchair investment - fully managed from sourcing and purchase, through refurbishment and tenanting and even resale.

Double the units, double the profit

Recent statistics from MPF Research cites the number of occupied apartments having increased by 215,000 (in the largest 64 US property markets) in the first half of 2010. This is almost double the units added in the whole of 2009 and the highest increase since MPF began analysing the data in 1992.

Greg Willett, vice president at Texas-based MPF, comments: "Demand is pretty stunning in the first half."

US property analysts agree this upturn directly relates to the increase in employment for young people between the ages of 20 and 29, i.e. the key tenant market for landlords. The Labor Department reports that US employers began hiring again in January 2010 and added an average of 147,000 jobs per month through to June.

Mark Zandi, chief economist at Moody's Analytics, says: "While payroll growth has been modest compared with pre-recession levels, it may be enough to have persuaded some families sharing houses with relatives to get their own places."

Foreclosure figures provide winning formula for rental market

While finances for homeowners may have not been fast enough to prevent more than 1.65 million foreclosures in the first half of 2010, the start of the US economy's recovery from the worst recession since the 1930s is great news for US property investors.

The research from MPF also shows a rental price increase of 1.4% in the largest markets in the first half of 2010, with an anticipated rise of 6% in 2011 and 2012.

Walt Smith, CEO at Riverstone Residential Group, which manages 175,000 units in 30 markets across the USA, explains: "Landlords have been cautiously testing the strength of the submarket their property is in to see if the market will withstand small rent increases. In most markets, they've been successful."

Henry Cisneros, executive chairman of LA-based real estate firm, CityView, agrees: "As homeownership continues to decline, people need somewhere to live. The rental market will be robust for the next few years.

Sterling opportunities add extra benefit

A robust rental market and ready availability of foreclosure stock are already excellent reasons to invest now in US property. Add the current favourable UK GBP / USD exchange rate (August 2010) and we have the cherry on the top of the US property investment pie.

To learn more about US property investment, please download the Axis USA Investment Guide; and you can check out currently available USA investment opportunities here.

Or if you are ready to invest in the USA and want some advice and assistance, pick up the phone and talk to Greg Glagow, Axis USA Portfolio Manager, on 0333 444 1440 for a no obligation initial discussion.

Live with Abundance

Rod Thomas FCA

Posted in USA Property

3 responses to 'Foreclosures Plus Employment Equals A Boost To The USA Property Investment Market'

FourEd

Added 26-Aug-2010 09:51

Something certainly needs to be done to revive the US property market. The figures speak for themselves and show that this is obviously working, slowly increasing people's confidence in the property market.

Marco

Added 31-Aug-2010 13:16

We agree, the number are getting better and we have also seen a large increase in the number of people especially in the UK looking to invest in USA property not juts in Florida and places like DEtroit but in the USA heartland.

Jay Redding, Real Estate Investment Consultant

Added 18-Oct-2010 12:03

The good news is, if you have the capital funding to do so, more and more foreclosures mean greater desperation on the part of sellers and lenders, and better opportunities for buyers. It’s going to continue to be a buyer’s market, to be sure. With the number of foreclosures, discounts, and short sales, there is no shortage of ways to find a good deal. But be forewarned: it’s a good time to buy, but a terrible time to sell. If you can afford it, it’s a perfect opportunity to buy-and-hold an investment property until the market climate warms up to sellers.

Rod Thomas

Our sentiments exactly. The time you will need to hold for is going to vary from state to state. A key element is to ensure you have decent positive cash flow so that income keeps coming whilst you wait for the prices to grow.