Sub-Group of Investors in Australia

[Jennifer D.]

Hello, Bigger Pockets. Is anyone else interested in teaming up to create an Australia-focused investing group?

I am an American living in Australia, with most of my investment portfolio in the United States. Being currently stuck in Australia, I have turned my attention to thinking about whether or not te-entering the property market here as an investor is a good idea.

I have found nothing like Bigger Pockets here in Australia. Basically, there are people trying to sell you comprehensive real estate packages, with very little transparency and almost no knowledge sharing until you fork over anywhere from $3000-$12,000 for a mentoring program.

I love both countries, but this distinction is very typical of Australia and one of the strengths of Americans. I think Bigger Pockets could have a strong presence in Australia.

Is anyone else interested in teaming up on a podcast or set of blogs about the Australian property market?

[Mike Lambert]

Jennifer, I'm an Australian citizen living in Canada and I'm a passionate international real estate investor. People who are knowledgeable about international real estate investing are few and far between on here so I'm trying to do my best to help those who want to explore this exciting world. I'll rarely suggest anybody not to invest internationally, just for the fact that it's often a good idea to diversify out of your home country and currency. As much as I love Australia, this is one of the last places I'd invest in real estate (unless I'm exclusively looking for capital gains).

My best advice for you is to first investigate if it's a good idea for you to invest in real estate there. Before investing a lot of money in one of those gurus' programs.

To start is, as a foreigner, you can only buy into new developments. So forget about BRRRR, flips and many of the strategies that are taught and discussed on BP.

Even if you could invest in anything, you need to know that it's extremely difficult to cash flow in Australia. Investment opportunities are mostly limited to the state capital cities, where the overall majority of the population live and the capital gain opportunities are concentrated. Even though some of these cities are small, all of them figure at the top of the cities having the most unaffordable real estate in the world. Real estate is extremely expensive in Australia. If you compare with the US, it's like if you could only invest in markets like New York or California and wouldn't have the South-East or the Mid-West.

Most local investors invest for negative gearing and capital gains. Negative gearing means that they use the losses against their taxes. That strategy won't make sense if you don't pay Australian taxes. While investing for capital gains is generally pure speculation and even though real estate is already very expensive, you will get nice capital gains is history is any guide. And this is why real estate investing is still very popular in Australia.

Investing is the US is much easier and more profitable. This is why so many Australian real estate investors invest in the US rather than in their own countries. Some even move to the US for that purpose. In contrast, Americans investing in Australian real estate are few and far between. That should tell you something. It should come as no surprise given what I wrote about. And if you still want to invest internationally (as anybody should in my opinion), there are many other countries where it's much more profitable and they're much closer to your (US) home.