Newbie · Auckland, NZ · Member since 2015 · 10 posts · 0 votes
I am a fresher and making attempts to start investing in the US. While doing all the necessary reading (as suggested by BP) within BP and outside, I come across some negatives by way of doomsayers talking about the 7 year cycles of depression and how we will be impacted in the US come September / October.
Can anyone help by talking about how house prices behave before and during a depression? And most of all, is it safe for a first time investor to get into the RE market at this point of time?
Commercial Multi Family Broker · Spokane, WA · Member since 2010 · 139 posts · 27 votes
11y
This will depend on where you invest. You'll have to come to know the economics of it all--or find a data site or someone willing to share those details.
Take the steps. What do you want to invest in? Where? Is that a good area? No, then where is the good area? What is hot in that market? etc.
I am a fresher and making attempts to start investing in the US. While doing all the necessary reading (as suggested by BP) within BP and outside, I come across some negatives by way of doomsayers talking about the 7 year cycles of depression and how we will be impacted in the US come September / October.
Can anyone help by talking about how house prices behave before and during a depression? And most of all, is it safe for a first time investor to get into the RE market at this point of time?
The trend does vary based on where specifically you may be looking at.
Real Estate Investor · Lake Worth, FL · Member since 2009 · 263 posts · 92 votes
11y
Like others have said you need to know how diversified the employment market is in the area you will be investing. If you have a major employer who supports 10% of the town then you could face serious pressures when there is an economic slowdown and they cut jobs, reduce hours, furlough employees or look to outsource work to cut cost.
You have done some reading on BP but are you ready for investing in the US.
What are your objectives, goals? What sort of investing education do you have? What sort of business management education do you have? Do you know the Landlord/Tenant laws in your target area? Do you have a reputable team or agent in place to act on your behalf? What sort of profits are you looking to average and can they be obtained through other financial instruments with less expense and risk? Do you have experience in determining the FMV, repair estimates, and do you have the financing ready to go when a deal is found?
"Can anyone help by talking about how house prices behave before and during a" recession
Yes, I owned property in Virginia and Florida during the recession, in my target areas in Florida we were crushed by the bubble bursting initially and then there was large profits found when others were on the sidelines during the recovery.
In Virginia my target area was supported by the military and there was No rent rate depreciation as we were at War at that time.
What you are asking for is what real estate analyst do you trust. Who's analyst opinion due you believe when it comes to the Interest Rate hike in the near future and the impact on loan demand/potential buyers.
Unfortunately most of these questions are only answered by having experience and knowledge, and using due diligence and deciding what is more probable to occur than not.
Sorry I couldn't write a one size fits all answer as the real estate markets are to diverse.
To answer your questions (Almost seems like an interview I am attanding)
QUOTE You have done some reading on BP but are you ready for investing in the US.
Ans: Almost
What are your objectives, goals? - One Flip and then Passive rental What sort of investing education do you have? -- no education --but little experience What sort of business management education do you have? --Am an Analyst Do you know the Landlord/Tenant laws in your target area? Do you have a reputable team or agent in place to act on your behalf?
Above two --YES I have a close friend / realtor/ property manager --in the area (Maryland) What sort of profits are you looking to average and can they be obtained through other financial instruments with less expense and risk? --No bank finance
Real Estate Investor · Lake Worth, FL · Member since 2009 · 263 posts · 92 votes
11y
"Whats your opinion of Maryland?" Your target market needs to be a little bit narrower. There are high crime areas in Maryland, and safe areas to live in. Depending where and how far you are looking at from Washington D.C. will have an impact on the initial investment price.
Beware the Maryland has some of the Highest taxes for income that I have ever seen. I know a high income individual who moved to Pennsylvania and telecommuted because of the tax burden Maryland puts on an individual.
I am not knowledgeable about "Auckland" and if they fall under the US Federal Tax treaty laws but Maryland does NOT recognize or abide by the US Federal Tax treaty.
Google "Maryland Income Tax Rate" "Maryland Personal Property Tax" "Maryland Real Estate Tax" for target area check to see if Maryland recognizes the US Federal Foreign Tax treaty between the two countries.
Then calculate your projected time requirements, potential tax implications, risk and reward for this investment.