Customer story: “Significant returns—without having to lift a finger”

A lot of people who want to get into investing tend to hesitate when faced with the opportunity to do so abroad, but investing in the U.S.A as an Australian is definitely a great option, even if it can seem daunting. Investment in itself can already feel like a game of chance, even more so when you can’t see the property in person.

 

Plenty of Australians don’t consider investing in the U.S.A property market because it’s so foreign and they think that a property that far away will cost them more time, money, and energy. But what they don’t know is that plenty of foreign investors find the U.S.A property market immensely rewarding (especially right now) and a great place to get significant returns. While the investment process will be different, our team at Star Dynamic can make investment easy and fruitful for anyone willing to try.

 

Pharmacist David Tran seized the opportunity to invest in U.S.A residential property through the recommendation of a friend who already experienced the benefits and ease of using Star Dynamic for their own investment. David had revenue to invest and had already tried his hand at investing locally so he thought to look beyond Australian borders and wanted to try something new. 

 

“If you want different returns, you’ve got to look somewhere different,” said David. “It’s low risk, with potentially even greater reward. So it is daunting because it is in the U.S.A and you’re not just going to fly over there… But at the end of the day, it’s all about the numbers to me.”

 

Many Australians, like David, have taken the chance and found success in the U.S.A residential real estate market. Today we’re sharing David’s story of how he leveraged international property investment to build the future he wants for himself and his family. 

Investing in the ‘great Australian dream’ first

 

When it comes to residential property investment, most people look to their local community or neighbouring areas first, and it makes sense to have that extra control, to be close by and hands-on with the purchase and have the ability to check-in and keep an eye on things. 

 

David felt the same initially and took on a number of different Australian-based investments to get different returns from local real estate, buying and flipping properties, but he came to realise that the local market was small and it was becoming harder to secure property investments. 

 

“It’s all about finding the deals. If you invest locally, your market is going to be very small, especially where I’m from where our population is a lot smaller,” David explained. 

 

He came to the conclusion that there were better opportunities elsewhere. It wasn’t as if the numbers were dismal, but he acknowledged that, in comparison to what he could be getting, his effort, money, and time could be rewarded when invested elsewhere. 

 

“The numbers worked but they weren’t that great compared (to the U.S.A). It’s effort and reward at the end of the day,” said David.

 

This led him to investigate how he could potentially flip properties and have higher passive income. “When COVID-19 hit and everything was locked down, I started googling and talked to my mates a bit more to figure it out. I’m at that stage where I’m in my late 30s, I figured that I’ve got to start doing something a bit different.”

Why David thought “abroad” for his next property investment 

 

At 38 years old and with two young kids, David wanted to put himself into different scenarios that brought about greater returns, luckily he was “okay with being uncomfortable” in terms of investing. After hearing about Star Dynamic and our CEO Lindsay, he decided to take the leap and gave us a call. 

 

“I looked at the U.S.A market before randomly but not seriously. But if I was going to do it seriously, I wanted to engage with somebody who knew what they’re doing. So when I had a quick phone call with Lindsay, the feeling I got was he was a quite honest person to deal with so that gave me the confidence to try it out,” said David. 

 

The U.S.A market, being much bigger, had more potential in David’s eyes. Because the U.S.A market has little to no stamp duty, longer-term mortgage rates, and fewer market restrictions, it easily became a priority choice even amidst good local property options. 

 

The potential returns were just greater compared to local numbers, especially when you can buy a house in the U.S.A for the same price as a deposit on an Australian property, making it low risk because the money down is so little compared to Australian investments. 

 

While you can profit from both (as David has), the U.S.A has brought about higher cash flow for many investors because of the stronger rental yields. That’s not to say that it’s perfect and easy, you still have to do your due diligence and research the area and its properties and then make the required renovations, but it’s definitely worth the effort you put in, especially since it’s a foreign market.

 

And the numbers can’t be argued, there really are more properties in the U.S.A compared to Australia. David knew that if he were to invest and flip again, he would look to the U.S.A.

 

“I probably wouldn’t look too much into residential real estate in Australia again, to be honest. Just because there are only so many properties here that you can invest in whereas in the U.S.A there’s just so many properties and opportunities.”

A done for you service to suit a time-poor investor 

 

This still doesn’t eliminate the fact that a foreign market may bring foreign practices or paperwork, some that you might not have the expertise or time to learn about and execute. 

 

But, just as we’ve helped our customers in the past, we helped David with our “done for you” service where we take care of everything from start to finish, making it the perfect add-on for anyone who’s got a lot on their plate but still wants to reap the benefits of a good investment. 

 

“I decided to sign up to the Done For You service where the Star Dynamic team manages it all for you. It took me a couple of months to get the property. Lindsay finds the deal, presents it to you, you look at the numbers and see if you’re fine with it, and then you go with it,” said David. “It’s a bit nerve-wracking in the sense that you’re literally just handing over money, you don’t know if it’ll work or if you’ll ever see this money again, but it came down to that honesty, that trust, and how genuine I found him so I thought that I’d give it a go.”

 

As a business owner and father, David didn’t have the time to check in with a team in the U.S.A or look through properties on his own, so he left it in our hands to take care of his investment and put the money into a good property.

 

“I’ve got two young kids, I’m quite time-poor, so for me it was that I had a bit of spare cash and I wanted to see what sort of a return I could get out of that,” said David.

 

Like with all investments, we approached David’s using the STARR method (strategy, team, acquisition, renovation, realisation). By implementing a good plan and hiring a team on the ground in the U.S.A, we acquire the property, renovate it to our client’s liking, and then our client is rewarded with their hard-earned profit after they sell or rent out the property. 

 

After buying a home in Detroit we found for $50,000 and flipping it (renovations added up to be just under $20,000), David sold it for $119,000. 

 

“The process is actually quite easy, considering. It’s a lot of paperwork but when you look at your potential returns and what you’ve actually got to do, I mean, where else are you going to get those returns in that short timeframe? It may not always be the case, but the potential returns, without having to lift too much of a finger, are pretty good,” said David. 

 

David speaks highly of working with Lindsay and found him to be a very honest and genuine person. David said that he was “easy to get a hold of” whether it was through emails or phone calls and that Lindsay eased any and all of his worries about investing abroad, so much so that if money comes through again, he said he would “definitely give it another go”.

 

Investing abroad isn’t as scary as many think it is. David’s property investment success can be replicated by anyone looking at investing in U.S.A residential property, so long as they have the help and support from a reliable and skilled team who know what they are doing in a foreign market. For people like David, and all our other clients at Star Dynamic Property Investment, investing in the U.S.A was low risk and resulted in significant returns. 

 

If you want to find a bigger market with bigger returns and have someone else do the hard work, give us a call

Linz’s Musings – Finding your true centre

Spring is certainly upon us, and with the days here starting to really warm up, more sunshine and footy finals upon us, it gives us that small ray of hope in a relatively grim view from lockdowns on the East coast.

And while I am certainly not going to sit here and tell you whether you should or shouldn’t be getting a J A B, I am going to suggest to make sure you listen to your heart…

I mean REALLY listen…

There is so much noise, so much conflict and fear being thrust on us at the moment (media, news, environment etc) that it can be almost impossible to actual hear yourself think through all this.

Fear, anxiety and stress all comes from a place of weakness.  When you are not aligning with your core values, anxiety and stress are the indicators your body gives you, the ‘signs’ if you will that something is off.

I spent all last week with my coaches struggling with this exact issue.  With so much going on, it is so easy for us to be knocked off course and end up wandering around the wilderness, not on our true path at all.

So my wish for you, is stop… take stock of where you have found yourself and get centred again.

Whether it may be mediation, reflection, prayer, exercise, reading… whatever form it takes for you to clear your mind of the rubbish and be back in a place that you can really listen to your heart.

Your core beliefs.

Suddenly you will start to hear them again, and once you are back on that path, there is a peace, a calmness…

Even though the storm is raging outside, it is like you are now in the eye of the storm.  It is here you will truly hear what you need to do, what you are being called to do.  Then do that, whichever choice it is, that is your ‘right’ one.

Its not my right choice, or your partner’s right choice, or even your children’s or parent’s ‘right’ choice… but yours.

As Rudyard Kipling wrote in his poem IF –

“If you can keep you head when all around you are losing theirs, and blaming it on you…”

This is the true meaning of power, of strength.

But first, we must really listen to our core beliefs, it all starts at our centre.

7 best U.S. states and cities to invest in

With 50 states to choose from, it can be overwhelming to decide where to invest in the U.S.A. Narrowing down your property search can also be challenging (in a good way) since there are so many promising residential properties in each state and city. 

Having numerous options across the country has only encouraged more investors to look into residential properties in the United States to boost their income and create financial stability.  

According to the Bureau of Economic Analysis (BEA), the cumulative level of investment in the U.S.A. from abroad increased from $158.6 billion to $5.96 trillion at the end of 2019, proving that there’s a strong return on investment in U.S.A. for foreign investors and that the market is only going to get hotter in the foreseeable future.

Why investing in the U.S.A. is a good idea

It’s understandable to feel apprehensive about investing in residential properties in the United States given that it’s half a world away from Australia. But this is easily remedied by hiring a dedicated, trustworthy team in the U.S.A. who can take care of your property so you don’t have to worry about the distance. 

The investment is definitely worth it once you consider how much cheaper residential property in the U.S.A. can be. To compare, a down payment of $100,000 for a property in Australia is already an entire real estate investment in some states of the U.S.A. 

Plus, the U.S. housing market is booming, with prices appreciating and the residential property trends pointing upwards. The uncertainties brought about by the COVID-19 pandemic has caused people to worry that this white-hot market will have a similar pattern to the housing bubble (and subsequent crash) in 2006, when lenders were more lax about background checks when approving loans for homebuyers and investors.

But the residential property market is unlikely to crash anytime soon, with stricter lending policies in place and hardset compliance enforced. Just keep in mind that it’s unrealistic for the market to maintain its upward trajectory forever, so it’s best to strike now while it’s hot.

7 states in the U.S.A. to consider investing in

Deciding where to invest in the U.S.A. requires careful consideration so that you get the most out of your investment. Fortunately, we’ve narrowed down the seven most ideal states and cities to investing in residential properties in terms of prices, taxes, and location. 

1. Michigan

 

Michigan is one of the best states in the Midwest to invest in because of its affordability. It’s one of the top ten states with the lowest cost of living and cheapest prices to purchase a house. It’s also a profitable location to invest in a residential property as the majority of people prefer to rent out a house than buy one themselves.

Recorded as the most populous city in Michigan, Detroit has been experiencing a skyrocketing demand for family rentals because the median price for a single family home is still below $100,000. This ensures that the rental market in the city leads to profit and positive cash flow for property owners.

The affordability of housing in Detroit allows you to purchase a great residential property for a low price in exchange for high returns and great market appreciation, especially if you rent it out. 

We’ve seen this city’s potential firsthand as we’ve helped our clients find low-cost properties in the best Detroit neighbourhoods so that they can get significant return on investment. 

Detroit had fallen back since the decline of the auto industry and the Great Recession in 2009, but the Motor City is definitely making a comeback now with new infrastructure, new electric vehicle plants opening, and even a large Amazon distribution centre! 

Further, Ann Arbor, Grand Rapids, and even Lansing, with it’s ‘medical mile’ of medical equipment manufacturing market booming, are all excellent cities to look to invest in.

2. Texas

 

Investing in Texas real estate is a “no-brainer”, given that almost two million people in the country moved there since 2010 because of the affordable housing and the work opportunities it had to offer.

Because it has so many options, Texas has varying levels of growth in terms of the housing market. Dallas, Houston, San Antonio and Austin are all considered high-growth markets because of economic growth and demand for housing.

Dallas offers plenty of choices for residential properties, making the housing market accessible for investors and potential renters alike. It also has a diverse economy, allowing people from different income levels to thrive in the city. San Antonio and Austin are also booming, offering similar growth and possibly even lower costs than Dallas or Houston.

It has the lowest rate of home ownership in the country as it’s more cost-effective to rent than to buy. The rising demand for rental properties is another enticing reason for investors to consider San Antonio or Austin as their city of choice.

3. Nevada

 

Nevada gained its moniker as the “Silver State” because of its silver rush days during the 1800s and, even now, mining is a crucial component to its economy. The state is the world’s fourth largest producer of gold and over 2,000 businesses are connected to mining in one way or another, which results in more work opportunities in mining companies and more people looking for housing.

As Nevada’s world-famous city, Las Vegas is still one of the premier real estate investment locations in the U.S.A. Aside from its booming tourism and entertainment industry, the city is also home to a thriving industrial sector including technology and finance. 

Locals and tourists alike reside and visit Las Vegas for a host of reasons: Work opportunities, housing market, incredible attractions, business conventions and trade shows. The pandemic hasn’t slowed this down one bit. Because it’s an international destination, Las Vegas has implemented safety measures against COVID-19.

People go to Las Vegas year-round, which is a good sign for investors who want to enter the renter’s market since people are consistently looking to rent in the city for short-term or long-term stays. 

4. Georgia

 

According to a recent report by the  U.S. News and World Report, Georgia ranks as one of the best states to live and work in and it received high ratings for its infrastructure, fiscal stability, and steadily growing economy. U.S. News also ranked Georgia as the 18th most affordable state for housing in the country, contributing to the upward trend of the local real estate market.

In fact, Atlanta is one of the fastest growing cities in the country, ranking fourth with the most residents in 2019. It’s also home to headquarters of Fortune 500 companies like Coca-Cola, The Home Depot, and UPS. The cost of living in Georgia’s capital is less than half as in cities like Manhattan, proving now is the best time to invest in Atlanta. 

There’s also a growth of capital as homes in Atlanta have increased in value by 5% while maintaining low interest rates for investors.

5. Florida

 

Florida is a renowned tourist destination with year-round sunshine, diverse and dynamic economy, and a thriving global business sector.  It’s unsurprising that people continue to flock to the Sunshine State and its population is expected to grow beyond 22 million by 2022 giving a serious housing shortage. 

Orlando is a great city to invest in Florida as its economy is booming because of its international tourism attractions like Walt Disney World, Universal Studios, and countless others. Investors can choose to target either long-term residential or holiday markets with their properties as both offer great returns. The market is also diverse because every neighbourhood has something to offer to everyone, whether you’re a single, family or first-time investor.

The city is also on its way to recovering from the COVID-19 pandemic with safety precautions in place while vaccines continue to be easily accessible to residents, making it a smart city to invest in.

Further, if the Orlando market is a touch pricey for your budget, Tampa and Fort Myers, on the West Coast, are seeing an amazing influx of people, great booms in values, and certainly more affordable.

 6. Idaho

 

Idaho has a growing job market and it’s become the state with the largest employment gain in the country, making it an attractive location for both potential residents and investors. A large percentage of people moving to Idaho are young entrepreneurs and technology-focused employees, which has resulted in an increase of business startups and a tech-centred economy.

Boise in particular has experienced an increase in population of 2.9% from 2017 to 2018, with the majority of newcomers prefering to rent rather than buy. This makes it a great opportunity for investors to snap up a bargain.

Boise may seem unassuming but it’s been recognised as the best place to buy a home in 2019. It offers diverse neighbourhoods for different kinds of people including the trendy Boise Bench area for millennials, the community-oriented North End for young professionals, and the prestigious Harrison Boulevard for well-to-do residents.

7. Illinois

 

Illinois is a geographically diverse state that’s home to agricultural regions, urban and industrial cities, and even natural resources like coal and lumber. More than 30 of the Fortune 500 companies call this state home including Boeing, Walgreens, McDonald’s, and Kraft Foods. It also has a diverse economy fueled by different industries like finance, livestock, manufacturing, agriculture, medicine, and biofuels.

This economic stability makes Illinois an attractive location to invest in. Although you’ll find different real estate options across the state, many of the best residential properties are found in Chicago.

Demand for housing in suburban and city neighbourhoods in Chicago are steadily rising, pushing home prices to rise exponentially in 2021. The Windy City is also known as the business and financial center of the Midwest, and its growing economy and overall affordability contribute to the great quality of life that residents experience. 

 

It’s also home to a great arts and culture scene, with more than 400 theatres and art galleries and 552 parks. 

Narrowing down your investment options isn’t easy when there are so many great locations to choose from, but reviewing these seven states and cities is a great place to start when it comes to investing in the U.S.A., given that they promise high returns to your potential residential property investment. 

If you need help choosing which state (and city) to invest in, book a call with us

Linz’s Friday Musings – Don’t lose focus

As another Friday comes to a close (well here in Oz anyway) we close the chapter on another week in our lives.

It’s a great story we are all creating – unique, jam packed with action, drama, and suspense (oh, and lockdowns!), and I am sure it would certainly make for interesting reading in time; sitting on our front veranda at age 85 reading to our grandkids or great grandkids the story of our lives – them sitting in awe at the twists and turns…

But how will YOU like the story?

Think about how you will FEEL when reading to them? Will you notice the missed opportunities you should have taken? Will you regret the decisions you didn’t make at crucial crossroads? Mourn for the missed time you had with family and friends at times we were “too busy” living and ignored life?

It’s hard when we are up to our neck in crocodiles and viruses, to really see when we are at a crossroads, and often how important is that next decision. In hindsight, we can look back and say “Wow, if only I had taken that step to do <insert thing here> how different might my life have been!” But at the time, is just another thing, that in our busy day to day lives, we just dismiss… I don’t have time… oh, sounds good, but I will do it later…yes I would like to, but not right now…

Then, soon turns into later, and later, and we keep missing these chances.

Particularly right now, with most of the country in some form of restrictions, the pressure on us is almost at breaking point.  It is very easy to miss opportunities as they present, or even just miss living…

And I don’t mean existing, I mean really being in the present, noticing all life around us.  Do you see how the wind rustles the leaves of the trees?  Maybe notice what your pet is doing, right now.  Don’t let the pressure force you to miss life, and to live to the fullest.

Even if we can’t get out and travel, forge that story of life; those next chapters in the book – with excitement, experiences, growth and learnings…don’t just rewrite the last chapter again..

What is Luck?

Happy Friday the 13th! Apparently, an unlucky day. Interesting what we deem in western culture as ‘bad luck’…

While there is certainly evidence in history to reasons why the number 13 might be bad luck, and possibly Friday (historically in the Middle Ages, Friday was deemed to be an ‘unlucky’ day to begin journeys) there does not seem to be any significant reason why Friday the 13th of any particular month should be so…

I guess as time moves on, a lot of us, particularly still working in the J O B, would deem Friday to be good luck, as it symbolises the end of the work week for many.

Truthfully though, I believe we all make our own luck. As was purported quoted by Samuel Goldwyn (Famous Polish film producer that some say the founder of Hollywood) – “The harder I work, the luckier I get.”

Whether it was indeed his quote or not, this rings so true…

While there are often things that are out of our sphere of control, and we might see outcomes as ‘unlucky’, the harder we work on areas INSIDE our sphere of control, the more favourable outcomes we get.

Those looking from the outside may say, “Wow, she is lucky!” or “How lucky is he?!” truthfully that ‘luck’ is made up of many hours of hard work, practise, and perseverance.

Particularly now, during times like the Olympics in sports, or even in business, we may see businesses or athletes succeed and think they are lucky, when really, they are just determined and never gave up when things got hard.

The road to luck is through perseverance.

So, while half of our country is still suffering under government-induced lockdowns, chin up Australia! Keep focusing on what we can control, rather than watching what we cannot, and you will see your ‘luck’ improving.

Linz’s Musings – The 8th Law of Nature

It is certainly amazing how quickly the weeks fly by, even when in lockdown! We can even start to see the days getting a little longer again, a little more daylight later in the afternoon, giving that glimmer of hope that spring is coming, albeit a way off yet…
Its hard to believe that in essence, here in Melbourne at least, and even other parts of the country, it feels a lot like Groundhog Day. It feels we are in exactly the same position in July 2021 as we were in March 2020…

Or are we?

I want to highlight one of the laws of physics, what I like to call the 8th law nature – the law of Natural Growth (or Decay). There is even a formula you can use to track this! But I won’t go into that level of detail, only to say that this law, together with the 1st law, the Law of Vibration which states that everything is moving, nothing rests, can be a catalyst for how we should act, what we should do when paralysed by fear.

These two laws show that nothing can stay the same.

Everything is moving and either growing or deteriorating.

You will see this in everything around us, people, plants, trees, our bodies, muscles, even cities and populations. If something is not growing or getting stronger or larger, it is decaying, or reducing or deteriorating.

There is no stillness.

This is the same with our goals, our relationships, physically & spiritually, even our financial plans, either we are moving towards our goals and growing, or we are decaying and getting further and further away. We cannot stand still.

So, are we in the same position? No.

Our mindset is different from last year, there is not the fear that there was, and a lot of people are starting to realise to what’s going on. Not as easy for the governments to take away freedoms.

We are forever learning, evolving, changing and growing – or if not, regressing…

Make sure you are at least doing something each day, however small to improve your future, because the laws of nature say that if you are not, you will be going backwards.

In the words of Martin Luther King: – “If you cannot fly, then run. If you cannot run, then walk. If you cannot walk, then crawl, but whatever you do you have to keep moving forward.”

Everything is always moving; which way are YOU going now?

Linz’s Musings – Time to rise and fight for our freedom

Happy Friday and I hope you are all coping in these unsettling times.  Looks like things here in AU are starting to go off the rails again, incredibly sad to see…

But today, I would like to revisit a theme I mentioned last year…

Now, I probably am also dating myself here and possibly a lot of my readers might not even have a clue what I am on about… but here we go…

Remember the old 90’s movie The Matrix?  One of my fav’s I will admit.  Written and directed by The Wachowski Brothers and produced by Joel Silver, the film was released on March 31, 1999, grossing over $460 million worldwide.  It won 4 Academy Awards (as well as others) and is a staple on any sci-fi ‘greatest hits list.’

Now, while the special effects were impressive at the time, what really stands out about the film, even after 21 years, is the lingering suspicion that we are being controlled by a force… whether a ‘Big Brother’ or HAL or ‘the administration’…

And, perhaps more frightening, that most of us would prefer to live in blissful ignorance rather than face the truth of living in a harsh world where we struggle to survive…

Hopefully, you remember the plot: Thomas Anderson, a computer programmer by day and hacker called Neo by night, is recruited to join the “real world” by Morpheus, leader of the human resistance against their AI overlords.

He gives Neo the choice to take a red pill and become part of the resistance or take the blue pill and forget he ever knew there was a real-world out there so he can re-join the rest of humanity in serving as an organic power source for the machines.

Neither choice is all that great, especially when the real world involves living on a bedraggled ship, eating gruel, and being chased by “agents” who are out to obliterate the resistance before it can free more minds from the Matrix.

Neo, of course, takes the red pill and (spoiler alert) becomes the hero.

In general, I believe the film was designed to make us think about free will, fate, the depths of oppression, and the power (and pain) of knowledge.

But this got me thinking…

 

What is an authentic life?

Now, we might not have some massive AI, all holding us hostage and feeding off our brainwaves (right?  We don’t right…?), BUT are we holding ourselves hostage?

Is the ‘Big Brother” really ourselves?

Or more to the point, are we ALLOWING ourselves to be hostages?  Walking freely into that cell, which may look like home, but still a cell…?

Right now, in these unsettling times, there are 1001 conspiracy theories about the COVID-19 pandemic – some quite amusing to read.  But I guess these sorts of crises can get us to thinking “Is there more to this?”

What if it is also our own mind, our own limitations that we put on ourselves holding us prisoner?  The lies we tell ourselves, the stories or ‘movie’ we show ourselves again, and again, as to what we are capable of…

What if the truth was something quite different…so much more?

Are we settling for life because it is comfortable, never trying to attempt anything ‘outside the box’ because we tell ourselves it is not possible?

Or more importantly, society & the media telling us we are not worthy…

Constantly (often unconsciously) taking that blue pill and going back to our blissful ‘norm’ coma…

Like Cypher in the movie, some of us may even try a red pill, fight for a few days/weeks/months, even years to see what is possible, fail, and then reach back for that blue pill-driven solace – settling back to what’s comfortable, what’s easy…

How many of us have actually taken the red pill, fought for their independence, their freedom whether it be financial, emotional, spiritual or physical?

Who wants to be the Neo’s of the world and fight to win their right to choose, their right for freedom?

Not freedom if… or freedom only when… but actual Freedom.  Isn’t that what this country is about – “For we are young and free” right??

Or more importantly, who wants to be the Morpheus’ who help others wake up to what is possible, and provide the red pill and the help & support to win…

Our world needs more Neo’s and Morpheus’ so choose team red.  Questioning what is happening is not revolt, it is awareness.  Be aware of what is going on around us all, what limitations are being pressed upon us, and what limitations we impress upon ourselves.

Rise up and let’s see what difference we can make.

The differences between property investment in the U.S. versus Australia and New Zealand

Investing in U.S. residential property is a viable option for Australians and New Zealanders given the market is doing incredibly well and is continuing to trend upward. 

U.S. property investment is a great way to gain an extra stream of income because a typical property in the U.S. is nearly the equivalent to a downpayment in Australia and New Zealand, making it a much cheaper option. Now that’s a bargain.

Investing in property in Australia and New Zealand can often cost hundreds of thousands of dollars—and that’s just in deposit. The price bubble in Australia and New Zealand has made it near impossible to land a good deal. But a property in the U.S. will cost you a fraction of Australian and New Zealand prices because of how hot the market is now. 

Many real estate agents would encourage you to invest while the market is booming

Now is the time to overcome the fear of investing abroad and land those properties at prices you’ve never witnessed in Australia and New Zealand before. 

Why is foreign investment in the U.S. residential property market so popular?

Real estate shot up when the COVID-19 lockdowns in the U.S. ended, causing a surge in the housing market. More people wanted to buy because they wanted to escape cramped cities or search for areas that are more conducive to working from home, causing prices to rise and demand to skyrocket. The economic repercussions of the pandemic didn’t seem to affect the market, making it more attractive than ever. 

With the relative stability of the U.S. residential market, foreign investors everywhere are experiencing positive cash flow possibilities. With prices so affordable compared to the Australian and New Zealand markets, investors are definitely getting their money back and then some.

In terms of debt, it’s much more favourable than their foreign counterparts. The long-term debt scheme has people in awe when compared to how quickly Australians and New Zealanders need to pay back debt. The debt terms last years and are generally pretty flexible, which we’ll get into later. 

And the best part is that the U.S. housing market is unlikely to crash soon. While this spike in activity resembles the events that lead to the U.S.’ Great Recession, lenders have stricter policies now and there are better structures in place to avoid such a price bubble bursting. With this stability, people can expect the market to continue on this trend. 

3 key differences between investing in the US and in Australia or New Zealand

In order to establish how different the markets are in the U.S. vs. Australia and New Zealand, we’ve listed down three comparison points.

1. Mortgage rates 

As mentioned earlier, mortgage rates in the U.S. tend to be more long-term than in Australia and New Zealand. They often span 10 to 20 years, giving the homeowner a lot of time to pay off their debt as compared to the variable rates in Australia and New Zealand. This rate is often fixed, which is a key difference to rates in Australia and New Zealand.

In Australia, it’s much shorter, spanning about 1-5 years—a fraction of the time in the U.S. In New Zealand, it begins even earlier, from six months to five years and all at variable rates, which makes it more difficult to pay debts.

2. Stamp duties

When it comes to stamp duties and taxes, the U.S. has little to no stamp duties at all which makes Australians “very keen to get involved” according to Your Investment Property Mag. Because of this, they find better opportunities in the U.S. without having to pay exorbitant amounts in taxes, unlike in Australia and New Zealand.

In Australia, stamp duties are state taxes that can be fixed or increased depending on your property’s value. Several other charges are added to that, like the Land Transfer Charge, causing your property investment to cost even more than you anticipate. These are extra payments paid on top of the property value, making it somewhat unattractive and expensive.

While Australia does have stamp duties, applying for the First Homeowners Grant is possible, rendering stamp duties unnecessary.

In New Zealand, stamp duties aren’t necessary, however, extra cash needs to be prepared for valuation charges, which is another expense on top of the property price. 

3. The nature of the market

In the U.S., there are less restrictions, making property investment more flexible. When it comes to raising capital or looking for ways to finance a purchase, they’re not as strict and they allow foreign investors to handle their investments with ease.

Real estate agents in Australia and New Zealand often take care of the property and become property managers themselves. But in the U.S., you need to hire a team in order to take care of the property, try to sell it, and maintain it. Having a team you trust can make or break your investment and it eliminates the need to have to fly over and check on the property yourself.

When it comes to investing in the U.S., many investors are met with hesitation because they’re not sure how to go about it, especially since it’s on the other side of the world where they can’t be hands-on with the investment. Even though people feel like it’s a big risk, a lot of successful Australian and New Zealand investors can vouch for it. 

“We were excited most about investing in the U.S. because of greater returns than anything I can get in Australia,” says Barbara Waller from Bairnsdale, Victoria. 

Investing in the U.S. doesn’t have to be a daunting task nor is it as difficult as it sounds. By acknowledging the differences between the U.S. residential property market and the Australian/New Zealand market, it’s easy to see that property investment in the U.S. has a lot more advantages as compared to local real estate.

 

If you want to invest in the U.S. and start a new stream of income that you can rely on, book a call with us

Linz’s Musings – Be IN the trenches

And it’s a Happy Friday from me again this week!  Been a massive week so far, hope you all have had a great week too!

Today I want to discuss strategy in a way.  I was reading recently about the widening gap in Australia between the wealthy and the poor – the “have’s” and the “have not’s” essentially.  Now we see this in a larger way in the U.S, it is one of the driving forces we need to be careful of when investing in the States, but we haven’t, until relatively recently, seen such a gap in Australia per se.  This is not just a problem for Australia or the U.S, it is happening all over the world now unfortunately.

Some stats, from the Australia Bureau of Statistics (ABS):

  • Australia’s richest 10% now hold more than 50% of the nation’s wealth (a share that is also increasing quickly)
  • The top 1% hold 16.2% of the nation’s wealth
  • The lowest 40% own just 3% of the wealth while the lowest 20%, less than 1%

To give you an idea of where we sit, the median (read, typical) net worth of all Aussie households was $558,900.  The average net worth of the top 20% of households is $3.2 million.  Bear in mind this is also 2018 statistics, so would be more now.

Hmm…note to self, need to get this stat for the U.S. too…

Now, I guess to some degree, although we may not have known the actual figures, this data belongs in the “thank you Captain Obvious” bucket.  But then again, we also want to be extremely careful of creating “poverty traps”.

For this reason, I have committed myself to helping Aussies and Kiwi’s invest in real estate to help avoid this, but it’s probably me throwing a glass of water into the ocean to stop receding water levels… But we try.

Looking at this we may ask, why is this happening.  When I ask this at the events I run, the resounding response is that the rich buy/have real estate. While this is true to a degree, I am not sure they the rich got wealthy through simply owning real estate.  I think it’s more just a great vehicle to park wealth and allow that wealth to grow more.

Property certainly is a brilliant way to get wealthy too, don’t get me wrong… but my point though, is that a lot of people look at the “wealthy” and see them buying real estate and thinking, that is what you must do to get wealthy.

Reality is, that to “get” wealthy you cannot just park money in real estate, you must be IN it, creating deals, making stuff happen, be ACTIVE in the real estate game.

This is how anyone can make money in real estate, but unlike the already wealthy, we cannot sit back idly sipping our cognac and watching the money grow… we need to be in the trenches, be active and make deals work.

There is no room for freeloaders here on the way to wealth, you need to make things happen!

Linz’s Musings – To win, just keep trying

Happy New Financial Year to all here in Oz! ‘Tis a strange time of year, we see EOFY sales everywhere trying to get people to buy things they don’t need, to save 40c tax… Bit like negative gearing really, pay $1 to save 40c. But hey, I am sure it works somehow, otherwise why would it be so popular?

On that note, if you haven’t checked out our latest blog on U.S. tax implications, check it out this weekend. We chatted to Yolley Kalos, U.S. registered Tax Agent and CPA here in Australia about all things tax.

Check it out here – https://www.stardynamic.com.au/u-s-tax-implications-on-real-estate-for-foreign-investors/

If you would like to have a chat to Yolley as well, there is a link in the blog to chat to her as well, definitely recommended!

And as I mentioned last week, it is a great time now to sit and reassess your goals.

How have you gone this first half year?

How did you go the past financial year?

Did you hit your goals and/or expectations?

If not, this is now an ideal time to adjust and move forward through the back half of the year with purpose and determination.

There is certainly nothing wrong with not having achieved everything you intended at the start of the year…

So long as you adjust and keep striving.

Remember, Thomas Edison said “I have not failed. I have just found 10,000 ways that don’t work.”

Find that one that does.