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16 Aug 2007

A Guide to Property Investment in USA

Grand Canyon View
Photo courtesy of David Swales 

The news relating to the property market in America is bleak at the moment as foreclosures rise, prices drop and building slows, but the reality is that all these factors add up to good news for foreign buyers – particularly investors buying in a currency other than the dollar and looking to hold for the medium to long term. 

After all, America has faced downturns in the past and its real estate market came back stronger than before.

The reasons why property in the USA is worth a very close look include a solid travel and tourism industry, fairly stable economic conditions and a political system that has remained solid for more than 200 years. 

At Nubricks.com, we would cite the following 10 reasons as the strongest factors driving property confidence in the USA forward: -

1) Political Stability Promotes Property Investor Confidence in the USA


America's political regime changes with elections, but its underlying system remains rock solid.  The country's system of cheques and balances (executive, legislative and judicial branches) ensures stability even when a presidential change is pending or in process.  America remains at the forefront of world politics and is a strong, and loyal ally to virtually the whole of Europe, Australia and other major international players. 

All of these reasons add up to give investors in property in the USA massive confidence in the political situation supporting the nation.

2) Historically Strong Economy in America Boosts Property Investment in USA


The American economy is taking hits in the media as of late, but the actual figures show the country is more than holding its own. 

America's 2006 GDP showed a purchasing power parity of USD 13.3 trillion and an annual GDP growth rate of 3.5 per cent according to the British Foreign & Commonwealth Office.  The country is considered the world's leading industrial power and is noted for its technological advancement and diversification.  The American economy is driven by strong steel, petroleum, automobile, aerospace, electronic, lumber and mining industries and as a result its economy is unlikely to falter significantly and dramatically to the point where investing in the nation no longer makes sense.

3) Low Unemployment Figures Fuel American Real Estate Confidence


The American labour force is more than 151 million strong.  The country experiences an unemployment rate of just 4.6 percent which is lower than many other developed nations in the world including the UK.  It also offers visa programmes for skilled labour from other nations, particularly in the areas of medicine, science and education and from a property investor's perspective this means that the majority of the nation is economically secure and well able to afford the real estate they desire providing an investor with an exit strategy or a rental market base to target.

4) Strong Tourism Industry Enhances Property Market in USA


With its diverse regions and world famous attractions, the USA has a booming tourism industry that continues to thrive.  The British government estimates that more than 6 million Britons visit the USA annually and overall, travel and tourism figures show this particular industry sector remains incredibly strong indeed.  The Travel Industry Association of America estimates the tourism impact on the country annually falls in around USD 703 billion, this naturally makes investing in property that is of appeal as tourism rental stock desirable for many real estate investors looking for a profitable way into the American property market.

5)  Diverse Geography Gives Property Investors in the USA Choice and Opportunity


America has numerous and rather distinct geographical regions.  Each brings with it its own potential draws for investors and tourists and businesses alike.  From the mountains of the west and the plains of the central regions to the beaches of Florida, California, Hawaii and Texas: America offers everything from near, year-round sunshine to beautiful winter wonderlands and even desert landscapes and it also offers property investors an incredibly broad wealth of choice and opportunity.  For example, an investor could target the tourism rental market in Florida, or they could exploit commercial property opportunities in the major industrial regions in America or even look at commercial letting opportunities to professional workers in the major cities in the USA.

6)  The Climate in America is Ideal for all Types of Real Estate Investor


Considering its vast size and its distinct regional characteristics, depending on where you buy property in the USA you can also tap into a relatively wide choice of climates.  Buyers here will find they can enjoy colder weather almost year-round in parts of the country such as Alaska, or they can bask in subtropical and tropical climates provided by Florida, Hawaii and California.  The full four seasons are felt in most parts of the country, with the north experiencing winters more fully than states in the southern region.  What this means is investors can specifically choose the region most suitable for their particular method of investment approach.

7)  Substantial Choice of Quality American Property for Investors to Choose From


The range of property available for sale in the USA is completely broad - from tiny condominiums to sprawling estates, real estate investors in America can find it all.  Although America is presently facing a pricing downturn partially brought on by a sub-prime loan crisis, real estate is still considered investment gold.  European buyers here in particular will find the lowering prices and the rising power of the pound and Euro currencies add up to very good buys being possible in virtually any part of the country.

8)  Ease of Buying Real Estate Makes Property in the USA Attractive


The buying process in America is relatively straightforward, even for investors from other countries.  As long as financing is in place, the entire process from start to finish can take less than 90 days and it generally does.  The American government places very few restrictions on foreigners buying property, taxes are also relatively workable, and while investors could face taxes on rental income, capital gains and inheritance, there are deductions and other practices that can lessen exposure.

9)  Large Expatriate Communities Make Property in America Feel Like Home


Expatriates from many other countries around the world already have purchased properties in the USA to join the great melting pot that is American society!  According to the BBC, more than 670,000 Britons now live in the USA on a full-time basis and in 2000 the U.S. Census Bureau reported that more than 28 million foreign-born residents from countries all over the world had set up home in America. 

This means there is strong demand from many communities, it means that annually as more foreign residents arrive that there is an increase in demand and additionally, there is fresh money coming to the market providing an investor with plenty of things to think about and markets to explore.

10) Ease of Travel to American Makes Buying Property in the USA Feasible


The United States is very accessible for most Europeans; Britons for example can travel without visas as long as they do not have criminal records.  Air travel to the USA takes between eight and nine hours from the UK and Europe and the country is also accessible via England's major ports.  This makes it easy for investors to visit their real estate, it makes it more likely that second home and holiday home buyers will consider buying real estate in America giving an investor an exit market to target - and it also makes it increasingly likely that tourism arrivals will continue to rise which is good for those who prefer to take a jet-to-let approach to property investment.

Property in the USA has long appealed to foreign investors, although recent news about the American property market might sound a little disconcerting, the main factors and fundamentals indicate that investment made into real estate in American can make a great deal of sense, particularly with the buying power afforded by the British pound or the Euro at the moment.
Category: USA Property

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