Buying US Property from Australia

[Account Closed]

I have invested quite a lot in Australia and I’m now looking at buying property in the US. There have been seminars here in Australia that I have attended that promote Phoenix, Memphis and Florida properties.
I’d appreciate any help regarding investing in the US and any pitfalls to watch out for.
Thanks, Grace

[Sharad M.]

Hi Grace,

I have helped some Australian investors purchase investment properties in US. What is your exit strategy? Are you looking for a buy and hold rental property or are you betting on appreciation? In my experience dealing with Australian investors, they seem to be EXTREMELY bullish on appreciation, which I don't personally feel comfortable with and don't recommend.

Some of the Australian investors that I have worked with like Phoenix condos because of the low entry point, but I wouldn't recommend that. IMHO, condos are rarely a good investment due to HOA issues. You will never own a condo free and clear and will always have a monthly HOA.

If you are looking for buy and hold rental properties, depending on your capital, I would recommend anything from a single family house to a 4-plex.

I recently helped an Australian investor purchase a 2 flat property in the market that I invest in, but he flew down to US and he was able to look at the property from inside and drive around the city to gain an understanding about the market where he will be investing. I showed him a few properties from single family house to 4-plexes and he liked the purchase price and rate of return for this 2 flat and decided to purchase it.

As far as which markets to invest in, there are some pretty good markets right now all over the US. I would recommend that if possible, you shortlist some markets and travel to US and spend some time in each market to have a better understanding of the market.

You will find a lot of people pitch you deals where they say Cash Flow = Rent - PITIPM (Principal, Interest, Taxes, Insurance, and Property Management). Don't fall for that, because there are a LOT of other expenses that come with owning a rental property, like vacancy, repairs and maintenance, utilities while the property is vacant, fee to fill vacancy, accounting and legal expenses, lawn maintenance, etc. Be sure to do your own due diligence before purchasing any property. Try to check all the information independently.

I think providing a little more information about yourself and on your investment goals will help people on this forum to provide you some really good information.

Good luck!