Australian investors snap up U.S. homes for cost of a car

These very cheap houses will generally be in predominantly black areas and it was the inability of blacks to pay for their accomodation that was central to the big financial meltdown in the first place. One can only wish the best of luck to the investors concerned

MUM-AND-DAD investors are buying bargain-priced houses in the United States for the cost of a new car.

They are cashing in on a combination of a rising Australian dollar and a depressed US property market which has seen recently built five-bedroom houses in cities such as Atlanta, Georgia, selling for as little as $35,000 - or the price of a new Holden Commodore.

They are also avoiding excessive stamp duty costs on buying property in Australia.

More than 200 people attended a seminar about buying US houses at Adelaide's Hilton Hotel last Monday.

The cheap US prices have seen a surge of Australian agents setting up businesses promising to match buyers in Australia with potential US rental properties.

Vincent Selleck, of 888 US Real Estate, based in NSW, said he had seen a "dramatic increase" in inquiries since the Aussie dollar reached parity with the greenback.

With the dollar reaching a 28-year high of $US1.01 on Thursday, Mr Selleck expected interest to continue climbing.

"Investors are now seeing incredible value buying in America where they can get homes that were $300,000 in 2007 for $35,000 with cash (rental) returns between 15 to 25 per cent net after expenses," he said.

He said most Australian investors were buying houses, townhouses and apartments where "the cash price today is a fraction of their former value or cost of replacement" in the expectation of a US economic recovery and appreciating US dollar over the long term.

While the median Adelaide house price hovers around $400,000, houses in the popular tourist destination of Miami are selling for as little as $14,000.

The US property market devaluation came on the back of the sub-prime credit collapse, which sparked the global financial crisis in late 2008.

One South Australian investor to take advantage of the "great investment opportunities" in the US is Sue Wright who, with husband John, is building a property portfolio to fund their retirement savings.

Mrs Wright said "outrageous" land tax and stamp duty costs in SA encouraged the couple to "capitalise on a perfect storm of conditions" and invest in the US, where property taxes were relatively cheap.

Mrs Wright's first experience investing in the US had encouraged her to look at buying more properties, and she attended this week's seminar at the Hilton Hotel by finance advice firm Knowledge Source.

"We started investing in properties in Adelaide in 2001 and have four now but I've never seen such economic conditions in my lifetime and after our superannuation went backwards we thought investing in the US was such a great opportunity," the 60-year-old said.

The Wrights bought a duplex in South West Florida - each semi-detached having a double garage, three bedrooms and two bathrooms - via an internet based real estate company for $US96,000 ($101,000) in March.

They rent it out for a net $12,300 a year.

"We thought we would sit on it for a few months and see how things panned out, and we have had no trouble with the tenants so now we are looking to invest in more properties," said Mrs Wright, who runs a small painting business.


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