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Yes we are very lucky! I took 4wks annual vacation leave + 2wks long service leave. Lots of people wouldnt have long service though.
I bought two properties in the US in Nov 2010, but they rejected my ITIN application because the properties werent rented by 31 Dec so I hadn't earned any US income in the 2010 fiscal year.
I have two cash-positive 3br homes in Texas. Bought $55K, rehab around $5000 each, rent $800/mth each. Property management very good. The high Aussie dollar means the $ stay in my US bank account though so the mortgage gets paid from my full-time wages – never thought I'd become a currency trader!.
Was a lot easier to do than I expected and I will definately buy more. But then I did lots and lots of research here and then spent six weeks over there looking & establishing good working relationship with a realtor who I trust(ish).
Agree with Nigel – you MUST go see what you're buying in person… but that's the fun part anyway!
Dont be silly Leo, Australians are just as greedy as Americans and everyone else in the world for that matter – its a basic human trait to want a reward for no effort!
I think there will need to be a significant drop in employment before there is an American-style crash in Australian property prices. Plus there is still the matter of low supply in Australia – America had a glut of properties prior to the GFC and the foreclosures added to the supply.
Never mind – they backed down and agreed with me! We're booking a Public Notary in South Australia for closing next week. Sorted!
You're so welcome – I remember how hard it was to find the right info when I was starting out. I think you're quite right about the difference between a co-op and a condo. My understanding is that with a co-op, the owners have to give their permission for anyone to buy/sell/rent in the complex – too much trouble, if you ask me!
Sorry, I havent bought in NY or NJ, my heart belongs to Texas
I recently bought two freestanding single-family 3br properties and the process is very similar to the properties I've bought in Australia – the only different thing is that it is considered normal to use a real estate broker rather than deal with the selling agent directly. Just dont forget that the broker gets 3% of the commission so, even though they are working for you, it is not in their interest to save you money!Hi buymore, I use http://www.neighborhoodscout.com as an initial source of info about good/bad neighborhoods. It provides crime rates, school ratings, and appreciation rates for each neighborhood. Next, go to http://www.city-data.com for the opinions of the people that live there.
Ongoing costs are not much different from Aussie property: Property taxes (like our council rates), home owners insurance (like our building & contents insurance), landlord insurance if you are renting it out, water/sewerage, trash collection, property management fees, maintenance costs and if the property is a condo/unit then you'll have body corporate fees too. The agent has this info.
Hi Rps13, I use http://www.neighborhoodscout.com as an initial source of info about good/bad neighborhoods. It provides crime rates, school ratings, and appreciation rates for each neighborhood. Next, go to http://www.city-data.com for the opinions of the people that live there. Also, you should check this site out http://www.buyingpropertyinusa.net/ which is a blog from a guy in Europe who bought in Las Vegas – it is very informative and provides a few warnings too. Finally, set up an alert in realtor.com to email you the types of properties you're looking for so you can get a sense of pricing in various neighborhoods.
I dont think prices are going to fall again. The alerts I get from realtor.com show prices are stable and/or creeping very slowly up.
Good luck & enjoy!
Thanks for the advice guys – Richard, your site is great, lots of good useful information.
It was Chase Bank that I tried to get an account, but it was a suburban branch so maybe they didnt have the correct info for non-residents. I've just booked my flight back there for Sept, so I'll try again when I get there. I also tried to set up an LLC online & they want an ITIN too – geez, its so frustrating!
So it looks like I'll have to buy in my own name, get a tenant in, earn some income, send in a tax return with an ITIN application, set up the LLC when I have the ITIN and then quit claim the property over to the LLC – all the while hoping to hell that no one sues me while the property is still in my personal name! I'll certainly be getting the top insurance cover possible…oh but wait, do you need an ITIN for insurance too?
Thanks Ambosh. Looks like a direct transfer is the way to go – I guess I dont have a choice without a bank account.
Yeah, I had a look at the HSBC website for USA – first there is no HSBC branch in the State I'm going to, but also noted that there is a requirement to maintain a $100K account balance! or a $50 per month fee. Neither is ideal for me.
I'm afraid Richard Lilycorp's info about ITINs is out of date as of April 2010 – the IRS changed the rules and you can only apply for an ITIN when attached to a tax return containing an amount to declare. I guess they want to cut down on the number of people trying to get an ITIN just so they can open a bank account!! hahaha.
I so hope you're right about there still being opportunities in September. I get a daily email from realtor.com on the properties I'm interested in and the prices are definately creeping up – slowly, but consistantly. Of course, there are still the cheap neglected problem properties in bad areas, but I'm not particularly interested in those. I might have to settle for lower quality by Sept.
Chris, while I havent bought property in USA yet (going over in April), I've been researching heavily and seeking advice on Aussie, American and European property investment forums.
The problem of being ripped off by property managers is really common and it seems that the only way to effectively control them is through the legal agreement written or reviewed by an American lawyer. Basically you need to become a "hard-ass", as they would say, and play the game their way. It might cost a bit in lawyer fees, but since property is being bought at $15-$50K, what's a few extra thousand to protect yourself?
For example, a clause stating that the p/mgr will sign a suitable tenant within 2 mths or they are fired with all fees refunded, would be a way to avoid them pocketing the rent and telling you that the property is vacant.
A clause stating that the p/mgr will email a digital photo of damage requiring repair and a digital scan of the tradesperson/s quote for any repair over $1000, would be a way of avoiding bogus repair charges. You would also want to get the tradesperson's phone number so that you can check that the work has been done.
The key seems to be the threat of being sued. The honest ones will sign an agreement with those clauses, the dirty ones wont.
I think you're getting confusing advice because there are so many options for you! You're in a great position , but it's really difficult to answer your question. There's no "right way" to invest in property – people have made money in so many different ways. There is literally "a world of choices" for you.
As you're a beginner, I suggest investing in residential property is less complex than commercial. $200K will leverage a lot of real estate, depending on the state/country you invest in – $200k wont go as far in NSW as it will in SA for example.
You say you primarily want capital growth, so that generally means you want to be looking at 3-4 bed family homes, rather than units – although inner city units have done very well in some states. I like suburban units because the rent covers most or all of the mortgage, whereas the rent on a house wont even come close – but my goal is an alternative income so I can quit my crummy job! You need to think about your own goals.
There are just way too many options for you to outline in one post – you'll just have to bite the bullet and sit down with a couple of books on real estate investment, then we'll be more than happy to help with more specific questions on the strategy you've chosen.
Best wishes on your property investing adventures!
Thanks guys. I guess I'm just having one of those "I-dont-know-what-I-dont-know" moments, as we all do I suppose.
Have just been reading about trust structures, but since I'm still using negative gearing, I thought I would wait until my first IP finally turns cash flow positive in around 8 months and then set up a discretionary trust.
I have a 1990 Diahatsu Mira. I put off buying a new car in favour of paying off my PPOR. Then I put it off in favour of putting deposits on IPs. Now I'm putting it off because I have 4 mortgages and cant afford a new car! One day….
I work with a bunch of economists & they're all predicting at least one 0.25% rate rise this year, maybe two. It's all to do with inflation rising too fast apparently.
I recently bought two freestanding single-family 3br properties and the process is very similar to the properties I've bought in Australia – the only different thing is that it is considered normal to use a real estate broker rather than deal with the selling agent directly. Just dont forget that the broker gets 3% of the commission so, even though they are working for you, it is not in their interest to save you money!
