I’ve just spent the better part of the morning marvelling at the ridiculously low prices that you can get real estate in the United States for at the moment. Case in a point, a 5 bedroom, 2 bathroom, 3 storey brick home just sold for $7,102 USD in front of my eyes in an online auction.
I get so many emails at the moment from investors keen to grab their $7,102 investment property in the States sight unseen thinking it’ll be a gold mine for them as prices eventually go up and the rent will cover the teeny tiny mortgage in the meantime.
“Caveat emptor” is Latin for “buyer beware” and it’s my motto when buying any piece of real estate for investment or otherwise. Whether the property is in the States or 3 hours away in Australia, regardless of the price I still advise you to go through a lengthy research process including:
• Finding out what the street and suburb are like. What are homes of similar quality renting for in the area? Have you had an independent property manager (ie: not someone working for the company selling it) go and give you a rental estimate? How long are properties taking to rent in that area?
• Is the home even rentable in its current state? What repairs need doing? Have you had a building inspector look at he property?
• If you’re looking in the States, what back taxes are owing, are you buying the property outright or taking on debt from the previous owners? Are you buying through a legitimate source? Also check out www.zillow.com for some great info on neighbouring properties.
• Have you made contact with a good (no, great!) property manager to look after the property for you?
• Do you have someone looking after your legal interest and making sure that any contract you sign protects you adequately?
And please please please consider going to visit the property before buying it. A few hours on a plane gives you an opportunity to see the neighbourhood for yourself, to view similar rental properties, to chat to neighbours and so much more.