Where on the US East coast?

[Investy]

I'm considering an investment into the US East Coast in the comming months but really would like to get a feel for where is best to invest.

I'm looking for the following;

1) Prices must have dropped significantly in the target city

2) I want rent year round

3) I want no letting restrictions (I heard of blocks where no renting is allowed, or where rental is only allowed for part of the year)

4) Decent rent yield of at least 7% AFTER deductions for ongoing maintenance funds etc

5) If off - plan I will not pay up - front funds apart from a modest holding fee


Any ideas folks?

[Olly]

Originally Posted by Investy

I'm considering an investment into the US East Coast in the comming months but really would like to get a feel for where is best to invest.

I'm looking for the following;

1) Prices must have dropped significantly in the target city

2) I want rent year round

3) I want no letting restrictions (I heard of blocks where no renting is allowed, or where rental is only allowed for part of the year)

4) Decent rent yield of at least 7% AFTER deductions for ongoing maintenance funds etc

5) If off - plan I will not pay up - front funds apart from a modest holding fee


Any ideas folks?

Hello Investy

Neither US east or west is the best to invest - as yet. Why? Because prices are forecast to decline at the current rate - circa 1.5%-2% per month - for another 12 months, or probably more. Judging also at the rate the economy is otherwise in decline, the wise investor will wait a tad longer. Of course, now, or within the coming months, could be a good time to acquire a fix on your US Dollar exchange rate. (Talk to a good Forex firm, will recommend the best / most reliable off board, if required.)

Then, before the bottom is reached, but is in sight, make your move and buy as much as you can afford on the basis the yeild will prove phenomally good too.

For reference; 20+ years international property investment experience. Also, I'm a Licensed Realtor & International Property Specialist and, Commercial Finance Broker.

However, I don't promote my services via these sites. Only wish to note the mistakes people commonly make and find wasy to improve my own services where relevant.

Olly

[The Soup Dragon]

Investy. Think one of the opportunities Olly has mentioned is for acting as a backer for the developer. (Not a large developer, but an individual with a good development track record.) Exit strategy etc is taken care of for you. If it’s the offering I’m thinking about the value of land used as security was worth circa 20% more than the funds being raised, so risk was low for investors.

As for the US, I agree with Olly’s comments on the other thread. Just be sure not to get caught out with having an inactive account that US Government can legally seize funds from. (Think that can only happen after a couple of years of no activity on the account, but am sure another poster will put me straight on that one.)

Feel like I’m trying to catch a falling knife in the US at the mo. American company I work for has sold its British arm. British employees can now sell their shares in company. Most are waiting for bulk sale date (end of month) but I opted to sell early as felt share price was high. Anyway, it’s a paper process. We fax them our request and they place it in a queue to be manually worked. We don’t know transaction has taken place till a few days later when funds appear in our accounts. Share price is almost 10% lower than when I instructed them to sell last week and the funds aren’t in my account yet. Hope the proceeds appear in my account shortly!

[Investy]

Thanks chaps.

I agree about waiting, I'm in no rush and had thought waiting a year or so might be about right.
In the meantime Im keen to get an idea of which cities to target. Someone mentioned Atlanta.

[oregon woodsmoke]

Off plan, or as we call it in the USA "pre-construction", is a dead horse. The folks who got in too late have lost a lot of money.

I suggest that you look at properties that are already finished and are being sold by individuals.

This is a very good time to buy in the USA. Prices are low, interest rates are extremely low (I don't know what foreigners have to pay for mortgages, but I can get money at 5.3% right now).

As for prices still falling, no investor pays asking price. Find a seller who is worried and who will accept a low offer. If you buy right now at below markert prices, the market can fall and you will still be covered.

Not to mention, once the bottom is reached, then prices start back up again. They don't just lanquish at the bottom of the market.

In my town (Bend, Oregon) sales have picked up and many properties have already sold this spring, and more people are coming in, intending to buy. I have a vacant rental right now and 90% of my callers want to rent for less than 6 months because they are planning to buy this spring. Bad for me because I can't get my house rented, but good for me because if real estate starts selling again, prices will start back up.

In the USA, right now, buy in areas where there are good jobs and the local residents have the money to pay rent. Or else buy in recreational areas where the baby boomers want to retire. Those are not the cheapest places to buy, but that is where you are going to find good value for your money, and the safest investments.

Florida, right on the beach, is a retirement and recreational area, but they are having serious problems with insurance and property taxes. Property taxes are enormous and insurance is nearly impossible to obtain. If you are thinking of Florida, do all your homework and gather all the facts.

There are beach towns in Georgia and Atlanta Georgia itself have areas that look decent.

South Carolina has areas where investing is good.

On the east coast, I wouldn't go too far from the south on the coast, or some of the New England states high up on the north east. Anything in the middle doesn't appeal to me.

In fact, nothing on the east coast is all that appealing. The west coast is certainly a healthier place to invest your real estate money.

[Olly]

Originally Posted by oregon woodsmoke

Off plan, or as we call it in the USA "pre-construction", is a dead horse. The folks who got in too late have lost a lot of money.

I suggest that you look at properties that are already finished and are being sold by individuals.

This is a very good time to buy in the USA. Prices are low, interest rates are extremely low (I don't know what foreigners have to pay for mortgages, but I can get money at 5.3% right now).

As for prices still falling, no investor pays asking price. Find a seller who is worried and who will accept a low offer. If you buy right now at below markert prices, the market can fall and you will still be covered.

Not to mention, once the bottom is reached, then prices start back up again. They don't just lanquish at the bottom of the market.

In my town (Bend, Oregon) sales have picked up and many properties have already sold this spring, and more people are coming in, intending to buy. I have a vacant rental right now and 90% of my callers want to rent for less than 6 months because they are planning to buy this spring. Bad for me because I can't get my house rented, but good for me because if real estate starts selling again, prices will start back up.

In the USA, right now, buy in areas where there are good jobs and the local residents have the money to pay rent. Or else buy in recreational areas where the baby boomers want to retire. Those are not the cheapest places to buy, but that is where you are going to find good value for your money, and the safest investments.

Florida, right on the beach, is a retirement and recreational area, but they are having serious problems with insurance and property taxes. Property taxes are enormous and insurance is nearly impossible to obtain. If you are thinking of Florida, do all your homework and gather all the facts.

There are beach towns in Georgia and Atlanta Georgia itself have areas that look decent.

South Carolina has areas where investing is good.

On the east coast, I wouldn't go too far from the south on the coast, or some of the New England states high up on the north east. Anything in the middle doesn't appeal to me.

In fact, nothing on the east coast is all that appealing. The west coast is certainly a healthier place to invest your real estate money.

Nice try Oregon Woodsmoke...

American's are masters at believing their own precdictions and, please I don't say this to cause offence. The stats across all the areas you mention just don't match either your observations nor predictions. And, neither do the top economists forecasts. Sales are very unlikely to pick up this Summer in Bend nor most other places across the US - sadly!!!

Current forecasts for Bend are a decline of circa 8% with as much as 11%+ in other parts of the State. You also mention California as a brilliant place to invest. Again, this State is experiencing its worst-ever drop in house values in part damaged by being one of the top three States which suffered from mortgage fraud over the past two years. That's along with Florida & Georgia with Atlanta itself at the peak in this State.

Unfortunately for you and anyone contemplating gaining reasonable rents is also going to be a big problem for certainly the next two years. All except the STR (short-term rental) market where at least they can benefit from increased tourist traffic.

Sorry Oregon; it's certainly too early to invest in the USA and will be for at least 2008 and probably till Spring 2009 when, with good fortune, the real bargains 'might' surface.

Other 'hotspots' already on the horizon and many en route investigating the possibilities are Albania (Europe) & Nicaragua (C.America) whereas Costa Rica is close to peaking for investors but not the retiree or vacation buyer.

Here's hoping a better investment climate and rental return, returns to the good ol' USA sooner rather than later.

Best of investing everyone...

Olly

[oregon woodsmoke]

Nice try, Olly.

You obviously do not live in Bend, because it is not "predictions" of property starting to sell. Property is already selling, and the buyers are already out there, and houses are in escrow and some have already closed.

Buyers are coming into the area in decent numbers and are in the market to purchase.

Since I live and invest here, and I talk to the investors and real estate agents with boots on the ground, I think I am better qualified to speak of the Bend market than someone who doesn't live here.

[Olly]

Originally Posted by oregon woodsmoke

Nice try, Olly.

You obviously do not live in Bend, because it is not "predictions" of property starting to sell. Property is already selling, and the buyers are already out there, and houses are in escrow and some have already closed.

Buyers are coming into the area in decent numbers and are in the market to purchase.

Since I live and invest here, and I talk to the investors and real estate agents with boots on the ground, I think I am better qualified to speak of the Bend market than someone who doesn't live here.

Oregon

Certain you mean well but you are reporting what maybe true on your street and a few others you know of but, across Bend as a rule, it's just not happening the way you mention. How do I know this? Because the weekly, monthly stats from the regional branch of the National Association of Realtors reports the facts & figures without personal bias, just the facts. What sold and for what price on which street and right down to the house number. Then, it takes the collective statistics, analyses them and issues these figures to each member of the NAR...of which I am one. Moreover, my colleagues based there report very similar 'facts'.

Of course your own findings are valid to you and well done if you've found a way to beat the trend, but tryining to convince people outside the US to invest their money in a country's housing market which has fallen to its worst state in 16 years, is not a clever thing to do 'right now'.

This Spring will dictate whether prices stop faltering and return to a semblance of normality or, continue to slide for at least another year. If the latter ocurrs, then probably a 'safer' time to begin looking will be early 2009. Though the market may not have bottomed out by then, it'll be close enough to consider current bargains before the market begins its rise. However, this all still maybe since many anlaysts predict this US housing crisis will remain till past 2010.

Clearly we shall all have to wait and see.

With kind regards...

Olly

[Investy]

Thanks for your input guys.

Oregon - although I personally prefer the west I wanted the investment on the East in view of shorter flight time when I need to visit.

Olly - I will be waiting as downward price periods tend to last longer than we might think.
Albania is not a goer for me as it is just too backward, too much corruption, a limited resale market, and not sufficient English speaking prescence. Morocco is the place - it really is the new Dubai with huge startling development going on and just 3 hours flight time from UK.
Agents tell me they sell a lot to Americans in the Tangiers area which is set to become the new Cape Town just 7km from Spain.
Very much a high end destination is being carved out deliberately and methodically by the Govt.
Dont think because its Muslim it is'nt modern. Take a look at Youtube. Plenty of vids showing them partying on the beach, have street races, listeing to Hip hop - its nothing like you might think. The gals all wear bikinis.

[oregon woodsmoke]

No problem, olly, you don't like the USA, so you go ahead and invest elsewhere, and you will be happy,.

I like the USA very much, and I am investing in the USA, and I am happy.

We'll meet back here 10 years from now to compare and see who has done better.