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I applied for a U.S investment loan with Citibank and HSBC. Neither were prepared to offer loan products for rentals to foreigners, however, HSBC were happy to offer me a loan for a 'second home' or a 'holiday home' in the U.S. They were also prepared to lend me up to 80% LVR for a second home or a holiday home purchase. You could always purport to buy the property as a 'holiday home' or 'second home', however, legally you would be in breach of the loan agreement if you were to rent it out.
I approached my own bank here (NAB) and they are prepared to give me a mortgage to buy an investment property in the U.S. However, the mortgage will be secured against my property here in Australia. Given that the loan amount will not be particularly large ($150,000) the risk is not particularly big in my opinion.
The biggest negative is the rate of interest…….i will be paying Australian interest rates, not U.S. NAB are also prepared to issue a mortgage either in $USD OR $AUD
I think to blanketly rule in or rule out entire states is ludicrous. You have to look at markets within those states. Florida has a number of major cities and regions and each one has and will be affected in different ways and will have different opportunities moving forward,
For example, miami beach has not been impacted anywhere near as badly as other parts of Miami and indeed Florida. You then need to look at the factors which underpin that, including high per capita income, strong tourist and overseas interest and investment and most importantly SCARCITY. Beachfront or waterfront property is a scarce commodity in large cities like Miami……..you can't make any more waterfront land once it has been developed. Scarcity creates and underpins value, even in a depressed market and the attributes that have contributed to Miami's growth up until now will still be there once the U.S economy and confidence improves.
I too am in the final stages of taking the plunge and choosing to invest in the U.S and specifically Miami.
By background, i work in property development, so i have a good grasp of property fundamentals and the thing that makes investing in the U.S so much easier is the amount of research on residential property trends and analysis in the U.S. It makes the Australian residential market look very immature by comparison.
The key fundamental in real estate is scarcity…….scarcity creates value and it also shields an asset to some extent in a downturn. That principle can be applied in any market at any time and it will hold true. Which is why i like Miami beach and downtown Miami. Water frontage is a scarce commodity and once it's developed that's it All things considered, Miami beach has probably fared the best of the Miami precincts and i think will hold the best prospects for future capital growth again, particularly south beach. There is a finite number of development sites left on Miami beach thanks to the building boom of the early to mid 2000's and this will create scarcity once the unsold stock of condo is soaked up by the market over the next two to three years. Given the amount of unsold stock, i think Miami is at least a seven year play at a minimum.
I have been to Miami twice and area's that i think have good potential are south beach, downtown, South Miami (Cutler Bay, Palmetto Bay, Keys gate), Aventura, and the Design District.
The other thing i like about Miami is that it will always attract foreign investment, both in the form of investors and wannabe residents. And indeed i think it's the foreign investment currently flooding into Miami which is putting somewhat of a floor on prices, particularly in the Miami beach area.
The thing about cities like Kansas, Cleveland, Detroit etc that makes me nervous is the illiquidity in those markets if things go pear shaped for any reason……..Miami there will always be buyers at a price, particularly in sought after area's of Miami due to the attractiveness of the city to Foreign investment.
Thanks to everyone for their advice so far…….i will share my research as well.
