Investing in US real estate has major advantages right now :
1. Property values 50 - 70 % below 2007 peak prices.
With some properties still 50-70 % below 2007 peak prices , real estate continue to be attractively priced and investors have a huge opportunity to buy office, apartment and industrial buildings because returns are way higher than other investments.
2. Properties are denominated in dollars – world’s reserve currency.
Investors are investing in U.S. properties for their safety and because they’re denominated in dollars, the world’s reserve currency. This helps them maintain the value of their property investments.
3. High rental returns - above 11 %.
The US buy-to-let sector is booming with investors being attracted by the sound investment due lower house prices and rising rents where average rental yields stand at 10-15%. Homeowners can now rely on house prices rising steeply, and with rental yields on the up, taking advantage of high tenant demand and low supply is an increasingly popular option.
The market is skewed towards landlords at the moment.
4. Property is a great hedge against inflation.
A high inflation rate is a reality that investors have to cope with. It is necessary for the year-on year investment value to be higher than the inflation rate. Adjusting your portfolio to combat inflation earlier rather than later can make a big difference. A Property is a Real asset and has intrinsic value and hedge better than financial assets.
Rental properties can be purchased with borrowed funds. This means an investor can purchase a rental property by putting down only a percentage of the total value. Essentially, an investor can control the whole property and the equity it holds while only paying a fraction of its total cost.
6. Tax Advantages
The rental income may be tax free if you do not receive net cash flow after expenses are deducted. This means that your mortgage is being paid down and you own more of the total value of the property (rather than just controlling it), but you do not pay taxes on the money that is doing this for you. In addition to this, you can also pull out tax-free money by refinancing your loan if the property appreciates and the interest rates have fallen.