Getting to know the USA market

USA Property 4U believes that there are many advantages for investing in the USA but understand that it can also be a minefield for a beginner. Where do you start? What state or city do you look at first? How do you know which one is better than the other?“You can buy a house for literally USD$1 …but you are only buying a liability?”

Avoid properties that will end up a liability

Some major changes have occurred in the last decade or so which have led certain parts of the USA into a steep and permanent decline.

Consider the so called “Rust Belt” – centred on Detroit. This is the home of some of the biggest car manufacturers in the world like GM and Chrysler. Manufacturing of many products has been moving offshore for years and areas like Detroit that rely on these industries have been hard hit. Both GM and Chrysler are in Chapter 11 (a form of bankruptcy) and have re-structured and dramatically cut staff. Many other similar businesses have done the same.

With unemployment sky high, job prospects getting worse, a cold climate and an inland location there is little reason for many to stay and the population is dwindling. You can buy a house for literally USD$1 in these areas, but you are only buying a liability that no one will ever live in or rent, but you will still be responsible for maintaining and paying taxes on.

Some areas in Nevada have as many as 1 in 4 homes in foreclosure. Some places are not just depressed – they may never recover. Beware of the “very cheap” offers!

Why Texas?

Texas is a very different story.

In Texas overall there are only 1 in 883 homes in foreclosure. However, in the area we specialise, there are less than 1 in 1,500 homes in foreclosure. (Source RealtyTrac.com) Whilst that means there are fewer opportunities, it means that the opportunities are much better and offer a higher quality investment. A lot of the fundamentals that make texas such a good place to invest are the same fundamentals you would look at in Australia – or anywhere else:

Population Growth. 4 of the Top Ten fastest growing Metro areas in the USA are in Texas. In the 2010 census, Texas had more than 25,000,000 residents. This is forecast to grow to more than 40,000,000 by 2030. That is the equivalent of unloading 4 Jumbos every day for the next 19 years!

There is no State tax. This can be over 10% in other States. In Texas the state constitution effectively prohibits one from being applied.

Strong economy. With Oil, petro-chemical, Electronics, Aerospace and many others being main industries and employers these are growing industries and much more stable regardless of the world economy.
In fact, if Texas was a separate country, it would have the 11th largest economy in the world!!

Jobs In the last 10 years, Texas added 732,000 net jobs, no other state has even added 100,000! In fact almost half of the new jobs in the USA since 2009 were created in Texas.

Forbes Lists In the 2010 Best cities for Young Professionals – Texas had 3 cities in the Top 10. The 2011 Forbes list “Best Cities to buy a home” had all four major Texas cities (Houston, Dallas/Fort Worth, Austin and San Antonio). 

Other attributes  Texas also has a great climate, nice coastline, is central to many main cities, is the US’s largest exporter of goods, and much more…