Hi All
Not sure if anyone has read this a few months ago, but this lady sums up the situation in the US regarding managing your investment, espec, re dealing with antiquated banking systems and bad prop managers.
CASE STUDY
The crash in housing prices in the US has Erin Jones on the lookout for another property there. "The deals are fantastic and the numbers are amazing for cash flow," says Jones, a consultant who has four investment properties as well as some land in Australia.
She paid just $US18,000 for her first house in the US four years ago — a total of $40,000 after taking into account all the repairs it needed. "It's cash flow positive and is let for $US600 ($696) a month," Jones says.
"My rule of thumb for a property is that for every $100,000 you pay you need $200 a week rent." That puts her well ahead but she says she was surprised how different the two markets operate. "Maybe LA or New York are different but I bought in a regional area and it's almost prehistoric the way they do things," she says.
For a start, the settlement period was twice as long as in Australia. Rents are collected by door knocking, as Jones says agents don't seem to have heard of direct debiting. Payment for repairs cannot be made online if the tradesman happens to have his account with another bank.
Whenever Jones phones her US bank asking it to transfer funds, she's told to drop into her local branch, which is obviously rather difficult. But for Jones the most frustrating thing of all has been finding a suitable property manager.
While the house has proved easy to let, she has gone through three agents and is convinced there's a business opportunity there for an enterprising Australian. "Tenants are paying rent and I'm not seeing it," Jones says, not because they're running away with it but because they "need prompting" to put it into her bank account.
"Finding an agent that does management is an issue," she says. "They have more generous sales commissions so aren't interested in a rent roll. There's a huge opportunity for an Australian to run management." Interestingly, the exchange rate isn't an issue.
"I opened a bank account and have kept the money there," Jones says. Because she paid cash for her property "it was no harder to buy than here". But she says she might look at borrowing next time. "You can lock in very low interest rates for 30 years," she says. Jones has started researching different areas in the US where prices have crashed in the fallout from the global financial crisis.
But she says "there are things you wouldn't consider here in terms of getting people you can trust. [Investing in the US] is something you don't go into lightly."
Cheers, MTR
Not sure if anyone has read this a few months ago, but this lady sums up the situation in the US regarding managing your investment, espec, re dealing with antiquated banking systems and bad prop managers.
CASE STUDY
The crash in housing prices in the US has Erin Jones on the lookout for another property there. "The deals are fantastic and the numbers are amazing for cash flow," says Jones, a consultant who has four investment properties as well as some land in Australia.
She paid just $US18,000 for her first house in the US four years ago — a total of $40,000 after taking into account all the repairs it needed. "It's cash flow positive and is let for $US600 ($696) a month," Jones says.
"My rule of thumb for a property is that for every $100,000 you pay you need $200 a week rent." That puts her well ahead but she says she was surprised how different the two markets operate. "Maybe LA or New York are different but I bought in a regional area and it's almost prehistoric the way they do things," she says.
For a start, the settlement period was twice as long as in Australia. Rents are collected by door knocking, as Jones says agents don't seem to have heard of direct debiting. Payment for repairs cannot be made online if the tradesman happens to have his account with another bank.
Whenever Jones phones her US bank asking it to transfer funds, she's told to drop into her local branch, which is obviously rather difficult. But for Jones the most frustrating thing of all has been finding a suitable property manager.
While the house has proved easy to let, she has gone through three agents and is convinced there's a business opportunity there for an enterprising Australian. "Tenants are paying rent and I'm not seeing it," Jones says, not because they're running away with it but because they "need prompting" to put it into her bank account.
"Finding an agent that does management is an issue," she says. "They have more generous sales commissions so aren't interested in a rent roll. There's a huge opportunity for an Australian to run management." Interestingly, the exchange rate isn't an issue.
"I opened a bank account and have kept the money there," Jones says. Because she paid cash for her property "it was no harder to buy than here". But she says she might look at borrowing next time. "You can lock in very low interest rates for 30 years," she says. Jones has started researching different areas in the US where prices have crashed in the fallout from the global financial crisis.
But she says "there are things you wouldn't consider here in terms of getting people you can trust. [Investing in the US] is something you don't go into lightly."
Cheers, MTR