Comment of the week: Investing in America

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A Your Investment Property online reader shares her experiences investing in the US

“Americans are not buying property because they can't get finance. Their complex credit score system means if they are foreclosed after a job loss or similar, it can take them years to build up a credit score to apply for another loan. And the banks are now very conservative about their lending (about time!).

“Americans also do not have the interest in property investing that we Aussies do - it's a different mindset. Property investing in the US for Aussies is a big risk - you need to do your research - physically in the US - not on the internet - and develop the right networks over there. You need to be prepared to set up LLC's, file IRS returns, open US bank accounts, have a mail forwarding service, hire a US CPA, set up asset protection measures for your Aussie assets, educate yourself on US property etc. etc.

“It's not something you do lightly and at low cost but there are benefits if you do it correctly. We toured the US two years ago, bought five properties across three states which are all returning between 14% and 21% net per annum.

“There are also great opportunities to keep secure tenants by offering "rent to own" to good tenants who lost their homes in the GFC through no fault of their own and either cannot save for a deposit or do not have a high enough credit score to apply for a loan. It is hard work and things don't always go smoothly but we have found it very profitable and rewarding.

-- Gail L

Congratulations Gail! As the winner of this week’s “Comment of the week” she gets a bottle of wine. You can also be a winner by submitting a comment on any of our online articles or starting a thread on our forum

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  • Jodie C says on 24/01/2013 08:19:48 PM

    Hi Gail,
    Can you explain what LLC is please? And what States have you bought in, as they all seem to have very different taxation laws, and what States do you know to be very wary of?

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