US foreclosure homes are attracting overseas patrons as many Australians are trooping to US territories hoping to land good investment foreclosure deals.
Australians are flocking to American cities in various Real Estate tours looking for viable investment opportunities in foreclosed homes. Most of them are purchasing foreclosed properties,
renovating them and renting them out to families and individuals. Many believed that this is their way of jumping in on opportunities that have sprouted from US foreclosures.
Real Estate brokers and professionals in the United States are scooping up most of these deals as they organize Real Estate tours, help foreign investors find foreclosed homes and provide the industry insider tips on how to manage a rentals business. The Australians are just too eager to provide the capital as they expect larger profits in the end.
One of the main reasons why Australians just relish the idea of investing in foreclosures is the fact they are relatively safe and sound investments. They just love the fact that clean titles are delivered to them with their purchase along with a reliable building inspector’s report.
In fact, to fund their purchases, Australians are taking out home equity loans just to raise money to buy US properties. Of course, others would say that this could be risky, but the strict banking regulations and their increasing population could provide the necessary cushion to prevent a housing crisis.
The fact that Australians hold a lot of cash to invest in overseas foreclosures is understandable. Australia’s unemployment rate is only 5.1% and home prices remain at an average of $500,000. The Australian dollar remains strong and stable, even at par in its value with the US dollar.
For an average Australian, making a $17,000 down payment on a foreclosed home, and setting aside about $700 a month for the necessary charges that include mortgage payment, insurance, taxes and about 12% of the rent in emergency fund for maintenance, repairs and vacancies, is such a small amount to pay for a house that can potentially be rented out for $1,100 a month, which is really a 28% return on his investment. Of course, this does not include the value of the property as it appreciates over time.
This is probably why US foreclosures nationwide are attracting not only Australians, but a lot of interest from people in other countries like Canada. In Phoenix, where foreclosure prices are slashed by up to 50 percent less that their usual market values since 2002, property managers are overwhelmed with Australians’ interest in Real Estate, going as far as closing deals on 16 properties in as little as six weeks.
Real Estate pros believe that this phenomenon is the free market at work where those who are brave enough to ride the tide come out of the experience as winners.
