Rental returns in USA

Depends on what area, but Judith is right, not as much as $100.  In many areas, we are seeing rental rate increases such as NY Metro areas and inner city NY.  Increases as much as 20%.  Indicative of job growth in the financial hub of the universe???  Always a good sign.

I agree with Judith, that you were likely misled or misquoted in your pro forma. 

I am a wholesaler here in a few markets in the US. It boils down to a couple things in my opinion. That is area and property management. Some areas are actually seeing a surge in rental rates due to the absorption from previous homeowners who have foreclosed. Also it depends on your property management. Some property managers are more aggressive than others. But you dont want to “over rent” it either. That could cause a strain on the tenant resulting in high turnover. But the drop that you see is very unusual unless it is in a lower end area. But even then, you should still get market rents via Section 8 (or HUD) rentals.You could have been over promised on the proforma . I dont know. We generally place tenants prior to acquisition so you know exactly what you are getting off the bat.Always buy on actuals not proforma especially if you are a remote buyer. Thanks for letting me share

Demetrius Mathis
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Hello all, my first post. 

I agree generally with the above comments.

I have a property in the Mid West and rents achieved don't seem to be dropping.  It also depeneds heavily on the region.  The Mid West seems to have borne a lot of the brunt of the GFC but things are steady now. NE and Calif seem to be doing OK but ROI's aren't as good. 

Judith, you did well.  That's a 32% gross ROI.  Where is it?

Michael O

To answer this question

the answer is Absolutely,BUT you have to do your homework and due diligence. Here in the US t right now you can become wealthy acquiring investment properties or at least be comfortable. On the other side of the spectrum you can lose your shirt. There are key factors that determine your success. Location,the asset , and property management. Very important to have a good power team .You are thousands of miles away ,so having a competent and trust worthy property manager is absolutely vital.Check the demographics of the area to make sure that there’s enough job stability and growth to support good tenants. So to be very short and answer your question, the answer is YES!

Demetrius Mathis
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Michael, I’m buying in Fort Myers Florida. The net is 17.275% which I am very happy with. I am receiving 16.258% and 14.358% on others. I look only at single family homes, even though I know there is a better return on duplexes, as i like the stability of families. I look at homes I believe can provide what families need, always check the sex offender register and school bus routes. I am not and never will be a slum lord and try to make a home nice and fresh for families to live in. If a stove or refrigerator is less than ideal it’s replaced. I look to homes that can be resold to families and not only to investors. In my opinion, if you buy at the very bottom of the market you can only ever resell to an investor and this is a market that doesn’t like to part with more cash than necessary. I look to good pockets in lower income areas as some in this group aspire to be homeowners. In middle income areas I look at the bottom to middle type house to attract those just entering the housing market. The 17.275% house above is now the second nicest house in the street and I anticipate will be purchased, when I’m ready to sell, by someone who is comfortable in this area but wants the status of a nice home. This house is very much talked about in this street as being an ugly duckling turned into a swan. There is something very rewarding in seeing a glimmer in the eye of locals who are excited by a transformation and gives me hope that they will aspire to home ownership and pride themselves on keeping the place nice. Small things like mulch on the garden was a huge talking point and now two other gardens are sporting mulch. Giving to a community and not just being a landlord is a lesson I have learnt from Steve.

Judi,

My rent rates have been stable for the past 2 years. It may fluctuate a little bit, maybe by $25, but even that is a lot. What area is your rental in, and what was the rate you were quoted at?

-Dan

Hi All,

With all the different posts on this forum, ranging from those that have actually traveled to the US and have gone through the process of purchasing property, and from those that have purchased US property from over here without having traveled over there, as well as those that would like to invest in US Property, but are not sure how to go about it, or where to go for help and advice, It's very clear that there is still a lot of confusion being thrown around.

Yes, many would be investors have brought property in the US and have done everything wrong, leading to it being a nightmare for them. A number of investors have done their homework and have brought very well.

Most first time buyers of US Property are not aware of the many differences in purchasing over there, as well as such things as Tax Implications..What structure should you buy through ( most people have heard about an LLC, but how many actually know what is an LLC or it's implications, or about other forms of Business Structures, both for an individual or company?) Buying through or setting up your own SMSF? How about the right location? As even buying in the wrong part of a street can make a huge difference, never mind what City / State / Suburb is right for you? Are you after mainly Cash Flow  / High Yield, or longer term Capital Gains? Would you want to buy an already fully renovated property ( surpassing Government housing Standards ) making sure you are buying a FREE and CLEAR Title that contains NO Hidden Nasties, Never mind qualifying Tenants, ( Do you know about Section 8 Tenants with the Government Guaranteeing the rent?) And Property management can be a nightmare if you choose the wrong company.

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Jeff