http://www.news.com.au/couriermail/story/0,23739,25183922-952,00.html
March 13, 2009 11:00pm
BARGAIN-hunting Australians are raiding the recession-ravaged American housing market where huge family homes are for sale from as little as $1.50.
Foreign buyers are travelling to US foreclosure hotspots where properties are listed for $US1000 ($1500), $US500 ($750) – even as little as $US1.
One prominent dealer in Detroit – a city crippled by the collapsing auto industry – has sold properties to Australian buyers for just $US3000 ($4500).
Vacuum cleaner manufacturer Theo Szinger, 67, of Brisbane, cashed in his superannuation and plunged into the ailing Detroit property market last year. He has not looked back, snapping up six properties for as little as $5000.
"You can't even buy a second hand car for that," Mr Szinger said.
He said his latest buy, a $16,000 home in such good condition it did not even need a paint job, came with a $10,000 US tax bill, but he was still thrilled with the deal.
"I have rented three of them already. I had tenants lining up before I had finished renovating one," he said.
He was pocketing about $1000 a week in rental income from each property.
He is among the enterprising Aussies who have swooped on the ailing US home market, where homes worth $200,000 18 months ago are going for a few thousand dollars.
"We've had a handful," Detroit foreclosure specialist Mike Shannon said.
"Typically, they have been paying $US3000 to $US5000," he said.
Mr Shannon said he had more than 100 lower-quality homes listed in the Detroit metro area for sale for just $US1.
His real estate website lists a double-storey, brick pre-war home with decorative ceilings for $US2900 ($4400) while $US900 ($1300) buys a three-bedroom, double-storey home that needs renovation.
Banks were desperate to offload the foreclosed properties rather than paying the fees associated with maintaining them, he said.
"At some point, when the bank realises they're not going to make any money back, they get rid of them," Mr Shannon said.
Data out yesterday shows foreclosure filings in the US were up 30 per cent last month compared with the previous February.
More than 290,000 homes nationwide were dealt a default notice and seized by the lender in February alone, the new figures from US housing monitor Realtytrac show.
There was one foreclosure filing for every 360 Michigan homes last month.
Nevada, Arizona, California, Florida and Idaho are the other foreclosure capitals.
Declining prices drained $3.6 trillion in value from the US's residential market last year, according to First American CoreLogic.
Mr Shannon said he had more than 100 lower-quality homes listed in the Detroit metro area for sale for just $US1.
It is interesting that a journalist with make a comment like that without explaining the complex issues behind these properties. Is it unusual to place a hyperlink to the businesses site in the articile for online newspapers or is that just common practice.
Hmmm. I wonder what LA Aussies take would be on this?
Don. wrote:Mr Shannon said he had more than 100 lower-quality homes listed in the Detroit metro area for sale for just $US1.It is interesting that a journalist with make a comment like that without explaining the complex issues behind these properties. Is it unusual to place a hyperlink to the businesses site in the articile for online newspapers or is that just common practice.
hi Don
Could you explain what you believe these complex issues are?
I lived in the USA until recently for 25 years. I do not believe the rent that Mr Vacuum says he is getting. In a nice neighbourhood in Detroit with completely new appliances and floors and air con they are getting $1000 a MONTH. The article makes no sense and is just a plant. Just think about it. If you could afford to pay $4000 in rent why not buy the property outright?
Detroit is one of the worst hit areas for housing and people have owned property there for decades without it appreciating.His deals may come back to bite him. The banks are offloading problem properties. There are really strict laws in the USA and if his tenants encounter radon, asbestos, unsafe water through old pipes, foundation cracks, termites, aluminium wiring, toxic mould or lead paint the cost to repair this would be astronomical, and he'd be sued by his tenants on top of it.
And then there's the myriad of taxes and fees which Mr Vacuum blithely waved off … banks, lawyers,county, city, state……
And, oh my, "lower quality" Detroit houses? Falling down wood houses in neighbourhoods with a population of 3 dogs 4 burnt out cars and 12 drug dealers.
If any Aussies think they should buy property in the USA they should do some heavy duty research.
Homes for $1.50?
Well I just came back from the US and $1.50 is over priced I seen homes for $0.50 lol seriously but don't think bargain because you would never rent it.On the other hand there are bargains about and you would be foolish not to try and take advantage of this massive property meltdown in America if you have some cash or equity.
I have done the hard yards finding the great deals in high rental demand areas at http://www.cashflowgold.com.auJason
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