The Recovering Us Real Estate Market Piques The Interest Of International Purchasers
On the other hand, prices in the US, until recently, have been at all time lows due to the global financial crisis and associated subprime crash.
The wave of foreclosures that swept over US homeowners has created a chance for international purchasers to enter the US market at rock-bottom prices.
Many Americans still can't get a mortage because banks have tightened their lending criteria so they don't get burnt again in a classic over-reaction.
Those foreclosed properties are coming back on to the market and are being acquired by cash buyers. Foreign investors with some capital available should be able to find bargains in a several states including Georgia, Florida, Nevada, Arizona and many others.
Foreclosed homes are cash sales - there is no time to arrange conventional finance - and are generally sold “as is”, which essentially means the seller gives no warranty as to the condition of the property.
Buyers normally recognise the need to spend some money renovating the home. If a sensible estimate can be made (and confirmed via a building inspection) buyers simply add this to the total price and see if it still makes sense in relation to cash flow and yield.
Now, not surprisingly all these people whose homes were repossessed still need places to live, so in lots of markets there really is a surplus of tenants and rental prices remain rather high, keeping the returns to investors at acceptable levels.
Not surprisingly investing in the US is more challenging and - in some ways - more risky than buying in your home market, but the potential rewards can be high.
Also, on a macro level the US economy is beginning to recover from its long post-crisis plunge and the housing market is beginning to come to life, feeding into this recovery. The US is starting to decrease its deficit and find energy independence through shale gas, helping it to withdraw from conflicts in the Middle East and solidify its position as the dominant global superpower.
The US is on the rise again, as a nation and an investment location.