Low purchase cost and high rental, is that possible?

[Matteo Cancian]

Hello everybody at BP,

I am looking at some buy to let properties in the US through a UK property company. The cities we are looking at includes Detroit, Atlanta, Toledo and Cleveland in Ohio, Buffalo and Niagara Falls in New York..

What I really find weird and makes me step back a little on the final move is the very high net return this property can give you despite a very low purchase price. The vast majority of the houses we are looking at vary from 35k to 50k and they are already rented out for at least 600$ per month.

So this properties give out anything from 15% to 22% Net return. This is something unseen in Europe.

What I am asking myself is: why are this people renting this low value houses for this high rentals when they could easily buy them and pay less per month for a mortgage? Does my doubt make sense?

Another piece of advise I am looking at is: how to know if a property company is legit or they are just trying to steal your money?

Thanks a lot for any help guys!

All the best

Matteo