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Further to my last post…
$50,000 lend on US property in Australians dollars at 4%= $2,000 per year.
Interest rate fluctuates so Aussie dollar falls against USD by 10%
It then takes $2200 a year in aussie dollars to service the same loan, which is a $200 a year increase. $200 on a $50k loan is about o.4 of one percent
Again, happy to be told I am wrong here?
Andrew
Hello Richard
I think I see serious flaws in your maths in relation to your respponse to Jim ( above )
A 10% increase in the repayment of a loan interest due to a change in exchange rate does not equate to a 10% interest rate hike. I may be wrong in my maths also but I image it would be equating to half to one percent. The 10% is being levied on an interest payment of 4% and 10% of 4% is less than half of one percent. I did this in my head and bow to your greater knowledge of overseas lending etc…but i still think you are either in error or at last making a statement that can most likely be taken erroneously by Jim and others.
The stats still look amazingly good on a $50k US property ( given the usual due diligence ) And don't forget authors like Harry Dent are predicting a 50% drop in Aussie property within 2 years. Now even if Harry is way out…where does one put ones money?
Jim, I am not saying investing in the US is without perils but I am doing it and you should get a lot of difffering opinions ( including the one Richard gave as he sounds very authoritative ) before making a decision.
Andrew
PropertyNow Real estate sales
