Now is the time to buy!
USD moves higher against the pound.
Just as I was talking about where to keep your rental profits only
two days ago! It seems the dollar has rallied and done us a favour.
Larry Elliot, Guardian.
"The pound fell to its lowest level against the US currency in
almost two years on expectations that the Bank of England will be
forced to cut the cost of borrowing to boost growth. A pick-up in
US industrial production also helped a resurgent dollar and pushed
down the price of oil and gold on global commodity markets.
The pound closed at $1.85 on the foreign exchanges. It is down 6.5%
since July, a move that will make it more expensive for British
holidaymakers to visit the United States but will make UK exports
cheaper to the world's biggest market.
Michael Saunders at Citigroup said: "Sterling remains vulnerable,
especially against the US dollar. The pound averaged $1.55/£ over
1993-2002 and it would not be a surprise to see a return to those
levels in the next 12-18 months."
So what does this mean for us? Well, it seems that now is a great
time to buy. There is a period of strengthening for the dollar and
who knows how long this will take, but one things for sure, its
better to have your money in dollars than in pounds regardless of
how you do it!
Good luck with all your investments
Ollie
ollie@usapropertyinvestor.co.uk
0845 438 0634
This blog is about property investing in the USA. Our aim is to provide low cost, high cash flow properties to our clients in a time when UK property doesn't offer returns worthy of investment.
Tuesday 19 August 2008
Tuesday 12 August 2008
Where will you keep your rental profits?
I get asked this a lot. Should I keep my rental profits in the USA
or transfer them back home? Well, as always, this is down to your
own financial circumstances. Whether you want to rely on your new
profits in the here and now, or think of them as savings that you
can use later.
The question isn't really anything to do with cash flow. It's more
to do with the weakness of the dollar against the strength of the
pound. In essence what we're talking about is dabbling on the
FOREX (Foreign Exchange.)
Lets say the dollar remains weak against the pound for the next
five years and in that time all or most of the rental profit you
earned was left in your US account. Then something changes, the US
dollar grabs a hold and starts to climb its way back. Next thing
we know its at $1.5 to the £1. If you exchange your dollars for
pounds your profits have increased even further.
example 1: bringing profits back now. (dollar at 2 to 1)
$10,000 /2 = £5000
example 2: wait 4-5 years. (dollar at 1.5 to 1)
$10,000 /1.5 = £6,666
So, if you don't have to exchange your profit, then wait a while.
Good luck with all your investments
Ollie
ollie@usapropertyinvestor.co.uk
0845 438 0634
or transfer them back home? Well, as always, this is down to your
own financial circumstances. Whether you want to rely on your new
profits in the here and now, or think of them as savings that you
can use later.
The question isn't really anything to do with cash flow. It's more
to do with the weakness of the dollar against the strength of the
pound. In essence what we're talking about is dabbling on the
FOREX (Foreign Exchange.)
Lets say the dollar remains weak against the pound for the next
five years and in that time all or most of the rental profit you
earned was left in your US account. Then something changes, the US
dollar grabs a hold and starts to climb its way back. Next thing
we know its at $1.5 to the £1. If you exchange your dollars for
pounds your profits have increased even further.
example 1: bringing profits back now. (dollar at 2 to 1)
$10,000 /2 = £5000
example 2: wait 4-5 years. (dollar at 1.5 to 1)
$10,000 /1.5 = £6,666
So, if you don't have to exchange your profit, then wait a while.
Good luck with all your investments
Ollie
ollie@usapropertyinvestor.co.uk
0845 438 0634
Monday 28 July 2008
Be careful what properties you buy Pt.2
Following on from my last post. Here are a few other things to consider when making that all important investment.
3. Realtors (Estate Agents).
I have relationships with several property investors in the US, and they all tell me the same thing. ‘Realtors are mostly women who would scratch your eyes out to make a sale.’ I apologise if this sounds sexist. The point is, Realtors have a duty to the seller so every property is a good deal regardless of its condition or location. If you’re looking to invest use a professional property finder to source your properties. Make sure they know where to invest, and more importantly where to avoid.
Only a property investor knows the true mechanics of what makes a good investment and what doesn’t. Most Realtors don’t own investments properties themselves.
4. Condition of property.
Sounds obvious doesn't it. A few years ago a guy from here in the UK went to New York to invest. He was bullish in his approach. He asked his realtors to find him any property that was under x value and he bought them all. He then found all of them needed extensive repair (he was buying through Realtors remember!) If a property is not maintained and is perceived as being a hazard or unsightly, local
government can enforce that the owner brings the property up to ‘code.’ In this story this guy couldn’t afford to do the repairs. His properties were seized and a warrant put out for his arrest. He left the US empty-handed. Make sure you have a trusted Property Management company to manage your investment from the outset. When I buy properties I always run it by my property manager who will either tell me yes or no.
5. Section 8.
‘Section 8’ is our equivalent of housing benefits. Your tenant has a portion of their rent paid by the state based on their financial circumstances. Buying property that is ‘section 8 approved’ with or without a tenant is a good sign that the property is up to ‘code.’ Each year an assessment is made on the property and a section 8 is extended providing it is in good working order and meets the criteria as
set out by the state. If you’re buying a property that is section 8 approved make sure it is up to code. In the event that it isn’t then at the next annual assessment
benefits to the tenant will be held until the property is brought up to code and your rent will go unpaid.
6. Rental profits.
Like all out of town investors, you will be using a trusted Property Manager to manage your property day to day. Your agent will collect the rents and pay you your rental profits. A UK-US dual tax treaty makes this financially advantageous for us.
However, you must obtain an ITIN (International Tax ID) number before you can receive rental profits. Your Property Manager has a duty to hold onto all rental profits until this is in place. Make sure you apply for this as soon as you can.
First off you will need a foreign notary to certify your passport. You can use any notary in your home town. This will be sent to HAGUE for approval. Only then you can apply for an ITIN. The whole process takes approximately 8 weeks.
There you have it. Avoid these pitfalls and it'll make your investment run smooth as silk. Just remember, use a good property finder to source your investments, make sure you cover all these issues listed here and that they understand them.
3. Realtors (Estate Agents).
I have relationships with several property investors in the US, and they all tell me the same thing. ‘Realtors are mostly women who would scratch your eyes out to make a sale.’ I apologise if this sounds sexist. The point is, Realtors have a duty to the seller so every property is a good deal regardless of its condition or location. If you’re looking to invest use a professional property finder to source your properties. Make sure they know where to invest, and more importantly where to avoid.
Only a property investor knows the true mechanics of what makes a good investment and what doesn’t. Most Realtors don’t own investments properties themselves.
4. Condition of property.
Sounds obvious doesn't it. A few years ago a guy from here in the UK went to New York to invest. He was bullish in his approach. He asked his realtors to find him any property that was under x value and he bought them all. He then found all of them needed extensive repair (he was buying through Realtors remember!) If a property is not maintained and is perceived as being a hazard or unsightly, local
government can enforce that the owner brings the property up to ‘code.’ In this story this guy couldn’t afford to do the repairs. His properties were seized and a warrant put out for his arrest. He left the US empty-handed. Make sure you have a trusted Property Management company to manage your investment from the outset. When I buy properties I always run it by my property manager who will either tell me yes or no.
5. Section 8.
‘Section 8’ is our equivalent of housing benefits. Your tenant has a portion of their rent paid by the state based on their financial circumstances. Buying property that is ‘section 8 approved’ with or without a tenant is a good sign that the property is up to ‘code.’ Each year an assessment is made on the property and a section 8 is extended providing it is in good working order and meets the criteria as
set out by the state. If you’re buying a property that is section 8 approved make sure it is up to code. In the event that it isn’t then at the next annual assessment
benefits to the tenant will be held until the property is brought up to code and your rent will go unpaid.
6. Rental profits.
Like all out of town investors, you will be using a trusted Property Manager to manage your property day to day. Your agent will collect the rents and pay you your rental profits. A UK-US dual tax treaty makes this financially advantageous for us.
However, you must obtain an ITIN (International Tax ID) number before you can receive rental profits. Your Property Manager has a duty to hold onto all rental profits until this is in place. Make sure you apply for this as soon as you can.
First off you will need a foreign notary to certify your passport. You can use any notary in your home town. This will be sent to HAGUE for approval. Only then you can apply for an ITIN. The whole process takes approximately 8 weeks.
There you have it. Avoid these pitfalls and it'll make your investment run smooth as silk. Just remember, use a good property finder to source your investments, make sure you cover all these issues listed here and that they understand them.
Wednesday 23 July 2008
Be careful what properties you buy
It's so easy to get carried away. I've been to visit properties where the price tag is £2k! So on paper this looks great, a lick of paint and some gardening and you've got a property that will rent for £220 a month. Thats over 100% yield - so good it's ridiculous. Problem is, these houses are in war zones, crack dens mostly. Buy in these areas and IF you're lucky enough to find a tenant, in fact you will find a tenant - or should I say they'll find you. You'll never get any rent from them because they've got no money and nobody is gonna manage the property for you either. Chances are you'll have people squatting in your investment before the end of the month and a once calculated 100% yield has just become the biggest liability you've ever owned! Stay away. Don't trust Realtors (Estate Agents) to find you good properties. A Realtor is working for the seller not for you, ask them what's a good deal and they'll tell you everything is!
Slightly off on a tangent but still on theme. Here are a few things to consider when making an assessment of what makes a good investment. These are the things I've seen a lot of investors fall foul of and there's just no need to.
1. Water Bills.
New York state says that the landlord is responsible for paying the water regardless of who is living in the property. They have the authority to reposses if you don't pay it. Dont leave this up to you tenant. Factor the extra cost into your rent and just pay it yourself - no exceptions, its not worth the hassle or worry.
2. City taxes.
Similar to our council taxes this is used to pay for emergency services, rubbish removal etc. Each property has a semi-regular assessment which indicates what the property is worth and what taxes are chargable. Often this assessment is totally incorrect. You see, if you want low taxes then you want it to be assessed low, but if you're selling you want it assessed high. Be careful, use good property finders (not Realtors!) who know the true market values and whether its been assessed in your favour.
Gotta go, more on this later.
Slightly off on a tangent but still on theme. Here are a few things to consider when making an assessment of what makes a good investment. These are the things I've seen a lot of investors fall foul of and there's just no need to.
1. Water Bills.
New York state says that the landlord is responsible for paying the water regardless of who is living in the property. They have the authority to reposses if you don't pay it. Dont leave this up to you tenant. Factor the extra cost into your rent and just pay it yourself - no exceptions, its not worth the hassle or worry.
2. City taxes.
Similar to our council taxes this is used to pay for emergency services, rubbish removal etc. Each property has a semi-regular assessment which indicates what the property is worth and what taxes are chargable. Often this assessment is totally incorrect. You see, if you want low taxes then you want it to be assessed low, but if you're selling you want it assessed high. Be careful, use good property finders (not Realtors!) who know the true market values and whether its been assessed in your favour.
Gotta go, more on this later.
Friday 11 July 2008
How much does it cost to be financially free?
The other day some of my investors were asking me where I came from and what I'm doing now. It got me thinking about work and lifestyle and stuff.
How much does it take to be financially free? This is something I believe in - its my religion and way of life! The answer is of course personal to your own circumstances. Which of course change from year to year as your own circumstances change. Children, marriage, etc these will all affect your personal wealth and impact on your lifestyle. The great thing about working towards this goal is that you have total control over everything you do and your decisions are entirely yours to make. Imagine working 1 hour at home for yourself. It's the equivalent of working 8 hours for your boss! That's how it feels to me.
My own goals are pretty modest in the scheme of things. I want to be a property millionaire within 5 years. That is to say I want equity within my portfolio to exceed 1 million. As for monthly cash flow, I figured that for every property I buy I can cash in £150 per month profit from the rent. Now if I own 100 properties,
that's an income of £15,000 per month. Of course I will have to keep an eye on my investments and I may sell some from time to time, but I will have full control over all my investments. Is that really work??
I've always tried to do things like this: for every additional expense I have, whether a car loan or I move house I motivate myself to off set that extra debt with new investments. It helps me focus and keeps a consistent balance of cash flow and investments.
My advice to you is to ask yourself what you want personally. Maybe you want to build a portfolio, maybe you just want one or two properties to leave the kids. Whatever you want, write it down. Open up Excel and start by putting down all your outgoings. If that's the figure you need to live the lifestyle you want, then work out how many investments you need to get there. Last of all put a timescale on it.
Check out our latest USA property investments. Fantastic monthly cash flow, and properties as low as £10k!
usapropertyinvestor.com
How much does it take to be financially free? This is something I believe in - its my religion and way of life! The answer is of course personal to your own circumstances. Which of course change from year to year as your own circumstances change. Children, marriage, etc these will all affect your personal wealth and impact on your lifestyle. The great thing about working towards this goal is that you have total control over everything you do and your decisions are entirely yours to make. Imagine working 1 hour at home for yourself. It's the equivalent of working 8 hours for your boss! That's how it feels to me.
My own goals are pretty modest in the scheme of things. I want to be a property millionaire within 5 years. That is to say I want equity within my portfolio to exceed 1 million. As for monthly cash flow, I figured that for every property I buy I can cash in £150 per month profit from the rent. Now if I own 100 properties,
that's an income of £15,000 per month. Of course I will have to keep an eye on my investments and I may sell some from time to time, but I will have full control over all my investments. Is that really work??
I've always tried to do things like this: for every additional expense I have, whether a car loan or I move house I motivate myself to off set that extra debt with new investments. It helps me focus and keeps a consistent balance of cash flow and investments.
My advice to you is to ask yourself what you want personally. Maybe you want to build a portfolio, maybe you just want one or two properties to leave the kids. Whatever you want, write it down. Open up Excel and start by putting down all your outgoings. If that's the figure you need to live the lifestyle you want, then work out how many investments you need to get there. Last of all put a timescale on it.
Check out our latest USA property investments. Fantastic monthly cash flow, and properties as low as £10k!
usapropertyinvestor.com
Tuesday 17 June 2008
My thoughts on property investing
"The times are a changin'" My mortgage broker likes to quote this line from a famous Bob Dylan song. Actually what he's referring too is the changes in the 'always reliable' UK property market. Problem is, its not so reliable anymore! Property investing in the UK has become an over-saturated breeding ground for would-be investors looking to build a 'nest-egg' or simply buy a couple of properties to get a bit more income each month. This is, and always will be a great thing to do – after all, passive income is the key to becoming financially free.
When I started investing in property some 4 years ago, it was nearing the end of cycle. The good times were now just 'OK' but I could still make a respectable living doing it, and since the hours I kept were less than two days work a week it was a great lifestyle.
Over the last 2 years or so, and more recently we've all watched as the property market has weakened, prices are falling, mortgage companies are squeezing, interest rates are high, and finance is generally very difficult to get. In a nutshell the whole market has lost its confidence. I have personally witnessed investors like myself dropping like flies over the last six months.
About a year ago I started looking at other possibilities. I have connections in the USA so it was only natural I was going to investigate there. There's been a media circus surrounding the state of the US economy of late, some say they're heading for a recession, others say they're already in one. There's no denying they've got some problems to sort out, problems which have a habit of affecting to entire western world and beyond!
The property market peeked my interest as there's been a lot of commotion around foreclosed properties. If you're unsure what that means, basically we're talking about repossessed homes. It seems that home owners no longer feel the stigma associated with losing there home or bankruptcy and walking away from your debt is the easy thing to do. Bad for the lenders, great for us! My latest trip to the states, I found a regular supply of properties not one of them over $15000 (US.) I was literally drooling as I was driving from house to house!
Now, lets take a look at the strength of the dollar. Did I say strength? I mean the weakness of the dollar! Right now, exchange your pounds and you’ll get 2 for 1! That’s double your money! I can buy a $15000 property for £7,500 sterling! And it’s always nice to know that there’s a strong sense of ‘renting is good, owning is bad.’ This means that, providing you buy in the right area, then you’ll be able to rent out your property all day long.
Conclusion:
I’ve been in the thick of property investing for a good while now with a decent amount of success. In my opinion, investing in the US offers some of the best opportunities around, where else in the western world can you buy property for less than the price of a second hand car! And that can only mean one thing, property prices WILL rise. The UK market has got some ‘correcting’ to do, and I’ll definitely be keeping a close eye on it. But for now I’ll be converting my pounds to dollars.
If you'd like to see a list of properties from my last buying trip then subscribe to my mailing list, download my free buying report and I'll keep you informed of the latest deals and information. usapropertyinvestor.com
When I started investing in property some 4 years ago, it was nearing the end of cycle. The good times were now just 'OK' but I could still make a respectable living doing it, and since the hours I kept were less than two days work a week it was a great lifestyle.
Over the last 2 years or so, and more recently we've all watched as the property market has weakened, prices are falling, mortgage companies are squeezing, interest rates are high, and finance is generally very difficult to get. In a nutshell the whole market has lost its confidence. I have personally witnessed investors like myself dropping like flies over the last six months.
About a year ago I started looking at other possibilities. I have connections in the USA so it was only natural I was going to investigate there. There's been a media circus surrounding the state of the US economy of late, some say they're heading for a recession, others say they're already in one. There's no denying they've got some problems to sort out, problems which have a habit of affecting to entire western world and beyond!
The property market peeked my interest as there's been a lot of commotion around foreclosed properties. If you're unsure what that means, basically we're talking about repossessed homes. It seems that home owners no longer feel the stigma associated with losing there home or bankruptcy and walking away from your debt is the easy thing to do. Bad for the lenders, great for us! My latest trip to the states, I found a regular supply of properties not one of them over $15000 (US.) I was literally drooling as I was driving from house to house!
Now, lets take a look at the strength of the dollar. Did I say strength? I mean the weakness of the dollar! Right now, exchange your pounds and you’ll get 2 for 1! That’s double your money! I can buy a $15000 property for £7,500 sterling! And it’s always nice to know that there’s a strong sense of ‘renting is good, owning is bad.’ This means that, providing you buy in the right area, then you’ll be able to rent out your property all day long.
Conclusion:
I’ve been in the thick of property investing for a good while now with a decent amount of success. In my opinion, investing in the US offers some of the best opportunities around, where else in the western world can you buy property for less than the price of a second hand car! And that can only mean one thing, property prices WILL rise. The UK market has got some ‘correcting’ to do, and I’ll definitely be keeping a close eye on it. But for now I’ll be converting my pounds to dollars.
If you'd like to see a list of properties from my last buying trip then subscribe to my mailing list, download my free buying report and I'll keep you informed of the latest deals and information. usapropertyinvestor.com
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