Where to invest for Kiwi

Question

I'm coming over from New Zealand to invest in rental property, you have a big country any ideas where I could invest for reasonable yield, stable local economy and an area that is on the way up in the future. By that I mean towns and suburbs of towns that while may be cheap now, have certain attributes that mean in the future will become more desireable and hence have above average capital gain in house prices. I am only interested in purchasing single family homes with 3 or 4 bedrooms.

My research so far has lead me to consider
1 Orlando- are hurricanes or high vacancies big problems
2 Las vegas- is it easy to get tenants
3 Houston ?
4 Sacramento?

Any guidance on these or other areas would be appreciated.

Regards Ben

My  research so far has lead me to consider
1 Orlando- are hurricanes or high vacancies big problems
2 Las vegas- is it easy to get tenants
3 Houston ?
4 Sacramento?

Any guidance on these or other areas would be appreciated.

Regards Ben

Jeff S. · Answer

For top level research, you can beat John Burns website.  His U.S. Housing Market Statistics (http://www.realestateconsulting.com/Intelligence.aspx?quicklaunch=true&region=us) provide an excellent, unbiased cross section of the US economy.  More specifically, his housing cycle barometer (http://www.realestateconsulting.com/Intelligence.aspx?quicklaunch=true&region=local) is an outstanding comparison of single family housing statistics for many US cities.  Rummage around his site, subscribe to his newsletters for free, and get his monthly updates.
          
          Iâ€™d forget about whatâ€™s cheap and recommend you not get involved in cities associated with stories about how bad things are (Las Vegas and Phoenix, among others).   You generally want to invest where the population is growing and jobs are increasing.  The US Bureau of Labor Statistics http://www.bls.gov/data/home.htm is a great place to start.   Personally, Iâ€™d consider almost any city in North Carolina with a particular emphasis on the Raleigh-Durham-Cary triangle.  
          
          The statistics and numbers are relatively easy to obtain.  The bigger problem I can see you facing is property management.  This is the hit-or-miss part of the business (mostly miss) and even if you get the perfect deal in the perfect area, you can still get eaten alive with lousy management.  Ensuring a location has an adequate supply of competent property managers can be difficult.  I don't pretend to know how to do this and don't know anyone who does.  How many deals do you intend to buy?  A medium sized apartment building will keep a property managerâ€™s attention more than a handful of single family homes.
          
          Out of curiosity are you looking closer to home, such as maybe Australia or Singapore?

Benito Aranyos · Answer

Australia like NZ has not had a real estate price crash like the  USA. Values here have dropped around 10% , rental yields are about 3to 7% after property taxes insurance etc with prices and yields in Australia being similar to NZ dropping only around 10%. Singapore I have not looked into but I would say is quite pricey.

The compelling reason to invest in the USA is prices have drastically reduced but as far as I know rentals have not which has lead to high rental yields net 10% plus without buying in a ghetto. From what I understand houses in the Usa are the most affordable in 80 years. From an international perspective the USA seems to be an investment chance of a lifetime at present.

I have around $US 300,000 to invest hoping to buy 3-5 houses.Thanks for info Will B , Jeff S :D

Will Barnard · Answer

Vegas has some large upside potential for the buy and hold investor. Tenants are abundant, the market values are depressed and conmtinue to decline.
You can make (real)positive cash flow here.

Orlando - talk to Rich Weese about that.

Houston - Many TX markets are good for cahs flow, Houston is one, but watch out for the specific areas. Also, you have to consider it is in one of the hurricane alleys. I stay away from this city for several personal reasons - again, just personal choice.

Sacramento - Very depressed market with a ton of foreclsoures and more to come. Values declining and have depressed dramatically. Could be a good spec play for future on a buy and hold. Not sure about cash flow.

Good luck to you.

Will B
Nationwide