Archive for the ‘US Property Investment’ Category
What should investors consider when assessing property assets for investment?
Property is a popular asset class offering secure ownership of a physical asset providing for an effective hedge against inflation with ongoing rental income (or yields) and potential for capital appreciation which is realised on resale or refinancing.
Physical property and land have been associated with wealth and prosperity for many years and are widely recognised as a crucial part of an well diversified investment portfolio. This asset class proves very popular with investors as the concept of owning and renting property is widely accepted and recognised as a sound medium to longer term strategy.
When selecting property investment assets it is important to consider the macroeconomic and microeconomic environment of the country where the property is located to aid in carefully evaluating the balance between realistic yields and capital values. Many investors have been drawn into booming property investment markets focusing on the capital growth and lifestyle appeal so to make quick profits or to “flip” units for short term gains leaving rental income through yield (and the realism of achieving those yields through supply and demand) as a secondary concern.
A number of property investors have suffered during the financial crisis which began to manifest in 2007. In many locations this has lead to significantly reduced capital values. Many property investors have found themselves involved in off plan property development projects that either have shown the developer to be under capitalised and in financial distress unable to complete the project, or find themselves holding properties in poor locations which lack sound infrastructure for further economic development or real rental demand, therefore not providing for a realistic and sustainable level of ongoing return or potential for capital growth for many years to come. Limiting factors such as these effectively reduce the overall value of property assets.
When considering any property it is crucial to examine the fundamentals behind the offer and consider the balance of risk against reward. Gower & Mae Investments will only consider property investments in countries and locations believed to offer sound fundamentals for property investment, provide realistic rental yields and/or achievable levels of estimated capital growth. The majority of the properties that are offered by Gower & Mae are turnkey and investment based development projects which can suit property investors seeking rental income and provide for fully managed property investments.
All the properties on offer are purchased through legal contract with a form of third party professional management service available either with onsite rental management structures or full property maintenance facilities in place so to ensure the property is maintained and efficiently ran to generate ongoing rental return. Owning property in this way typically involves reduced or little input or involvement from the owner however investors must ensure they understand the costs involved in the ongoing management of there property investment. Rental payments are made directly to owners via the management company in most cases.
When looking at the market for property investments there are many different options available to choose from including: Buy to Let, Hotel Room Investment, Below Market Value (BMV), Leaseback Schemes, Sale and Rent Back Schemes, Commercial Property, Off Plan Developments, Accommodation for Students and Student Investment Property, Care Homes, Repossessions, Fully Managed Properties and Resort Property to name just a few.
The team at Gower & Mae look to source the best property investments and rental income opportunities within the market and deliver them to our clients through clear and informative methods that highlight why we feel the property represents a real opportunity. Feel free to contact us today to find out more about our products and services.
Waves of investors from Europe, Asia, Canada and Latin America spend £53bn on real estate as prices tumble in the USA.
A weak dollar and the tumbling house prices that resulted in foreclosures across America have attracted a wave of buyers from Europe, Asia, Canada and Latin America.International buyers accounted for $82.5bn £52.7bn of homes sold in the US in the year to March, almost 9% of sales, according to a survey by the National Association of Realtors – a jump of 24% from the previous year.US house prices crashed spectacularly in 2007 and are still more than 30% lower than their peak in 2006, but recent data suggests they are bottoming out.The S&P/Case Shiller index of prices gained 0.1% in March, though it was still down 2.6% from a year ago. The dollars weakness has also drawn new buyers.The National Association of Realtors president, Moe Veissi, said: “Low housing prices, a good inventory condition and increased buying power with todays exchange rates help attract international clients.”Five states accounted for 55% of purchases – Florida, California, Texas, Arizona and New York. Florida was the fastest growing destination, accounting for 26% of foreign sales.More than half of foreign buyers came from Canada, China, Mexico, India and Britain.Four in 10 wanted somewhere to live and a similar portion were looking for holiday homes or buying to let.More than 60% paid in cash, and many chose not to live in the US for more than six months a year for tax reasons.
A good article highlighting the popularity of buy to let investment in property with Expats. In addition to conventional buy to let property Gower & Mae deals with a number of other buy to let properties including. Student buy to let investment property, Hotel Buy to let investment property and buy to let properties in the USA including buy to let in Florida and Buy to let in Atlanta. Contact us today to recieve additional information.
Why buy-to-let homes are a worthy investment
UK properties can provide a reliable income for expats.
Buy-to-let properties are an attractive source of income for expat investors and looking in your home country is a particularly alluring prospect.
A home back home provides a safety net for Britons abroad, and a diverse portfolio can also form part of your pension.Holiday lettings often benefit from a coastal location, but its the capital that remains truly popular for long-term landlords.London house prices have defied the slump, in part due to the interest from international buyers. The capital is currently the fourth most expensive place to buy in the world, according to figures from Savills, and the sales keep on coming. More than £3.3billion was invested in London property last year.Phil Cox, the owner and publisher of What Boat? International magazine, currently has three properties in the UK, one of which has been let for more than 15 years. “Ive had success with properties with good transport links to London,” he said. “Its also important to buy in an area you know well.”But securing finance from outside of the UK may prove tricky. The main high street banks that will lend to expats are Halifax, part of Lloyds Banking Group, and NatWest, part of the Royal Bank of Scotland. Lloyds TSB International is a popular banking choice for expats but last year said it would no longer accept mortgage applications from overseas buyers living in Italy, Ireland or France. Offshore operations are also an option – Mr Cox, for example, used NatWest in the Isle of Man.
Gower & Mae has buy to let property with non status finance available contact us now for further information.
According to many property companies in Europe the high levels of demand for US property are coming from the Far East and in particular Chinese Investors. According to the article below maybe some of these organisations should look to Canada as buyers are on the increase. Please register for more information on our properties available in the USA
Canadians are playing a larger role in the U.S. housing market than in any year since 2007 and they outpace buyers from China and Mexico by far, according to a new survey of American real estate brokers.
The survey by the Washington-based National Association of Realtors (NAR) said foreigners snapped up $82.5-billion (U.S.) worth of houses in the 12-month period ending March 31. That compared with $66.4-billion a year earlier.
Canadians made up the largest share of purchasers, accounting for 24 per cent of all international sales. That compared with 23 per cent in 2011 and 11 per cent in 2007.
Chinese buyers made up the next largest segment at 11 per cent, followed by Mexicans at 8 per cent.
While sales to foreigners make up only about 10 per cent of all U.S. home sales, they are among the fastest-growing segments of the market. International sales climbed 24 per cent last year, according to the survey.
People from Canada and elsewhere are being lured by rock-bottom prices, a massive supply of foreclosed properties and record-low interest rates.
So its definitely happening in the UK at the moment. The rental markets here are buoyant, ask any letting agent near to a major city in the UK how the market is and they will tell you its highly active and competitive, I have even heard of people conducting closed bids on rental properties in the South East or England landlord have not had it this good for a long time! Much the same seems to be happening over in the US at the moment. A nervous population, ,struggling with the economic climate coupled with low mortgage availability and high requirement for cash deposits to be invested into property have forced many into rented accommodation and the trend looks set to continue.
We have have seen it happen in the UK and this has corresponded with a direct link to the number of buy to let landlords entering the UK market place seeking to capitalise on the current environment. They are seeking strong rental yields and many are seeking to hold for potential capital growth when markets start to recover.
In the US property Market currently there are a number of foreclosures and special property situations that can offer buy to let landlords higher rental yields than the UK and huge potential for long term capital growth. Values in some parts of the US have been significantly depressed when compared to the falls in the UK market and offer a situation rarely seen, buy to let investors can acquire properties at significantly reduced capital values with professional tenants in place providing for strong rental returns from the outset.
Gower & Mae have access to high quality large family homes in the Atlanta area. We can offer Atlanta Buy to Let property which have been foreclosed, renovated, tenanted and have experienced management agents in place to look after the properties. The tenants we have secured are professionals seeking family friendly neighbourhoods who have aspirations of purchasing the properties they rent. We know this from the fact that these tenants are prepared to secure the properties they rent on lease options agreeing a figure that they will purchase the property at after 3 years of rental (yes we can also offer a 3 year rental contract) and paying a premium to do so. The properties we are working with are typically providing 10% NET rental yields, after all costs you can make a fantastic return on your capital and you have a motivated tenant who could buy the property from you in 3 years time. If your a landlord or property investor it may be worth looking into this market as one that can offer an alternative to another UK buy to Let property. If you would like to know more about the properties that we can offer please contact us by visiting our Buy to Let Atlanta Property page and register for additional information.
Below is an article highlighting the current rental demand and demographic situation in the US, so we ask the question again is now the time to invest in the US rental Property market? We will let you decide.
The Share of privately owner US homes fell to a 15 year low in the first Q as falling house prices and stringent lending conditions push younger Americans in particualr into renting. The homeownership rate slipped to 65.4 percent, the lowest since the first quarter of 1997, the Commerce Department said on Monday, with the rate for Americans under the age of 35 dropping to an 18-year low.”You are seeing the perfect storm of age, financing and the business cycle coming together to push down the homeownership rate,” said Steve Blitz, chief economist at ITG Investment Research in New York.The homeownership rate, which was measured at 66.0 percent in the fourth quarter of 2011, peaked at 69.4 percent in 2004 at the height of a housing market boom fueled by cheap credit.The collapse of the U.S. housing market bubble triggered the 2007-09 recession. With house values tanking, many – especially the younger generation – are rethinking the so-called American dream of owning a home.House prices have dropped about 32 percent from their peak at the end of 2005, leaving millions of Americans with properties worth far less than their mortgages and forcing many others into renting.In the first quarter, the median asking sales price for vacant homes on the market was $133,700, the lowest since the first quarter of 2005, the Commerce Department said. That compared with $133,800 in the fourth quarter.The homeownership rate for those aged 35 and under fell to 36.8 percent in the first quarter, the lowest since 1994.This group was seen as the hardest hit by the recession, driving many into their parents basements or to share lodging with friends and relatives.
Here are Jan & Feb’s supporting statistics regarding the continued uptrend & fortune of US homebuilders.
Related Gower & Mae properties for consideraton - Altanta buy-to-lets
Related Gower & Mae properties for consideraton – Jacksonville buy-to-lets
Small homebuilders are seeing increased business in conjunction with that shown by commercial real estate trends. During the crisis, the focus was on big builders like Beazer Homes USA and Toll Brothers. Private builders also experienced the recession. In 2009 one Ohio builder sold only 12 homes in 2009 and expects to sell 21 in 2012. This is in comparison to the six it sold in 2010 followed by seven in 2011.
Numerous small builders collapsed due to the market in 2007. The current job market’s improvement is bringing interested home buyers to the table again. In January and February alone, one Atlanta builder closed on 18 properties. That compares favorably to the two sold in the first two months in 2011. Showings are on the rise in Atlanta, Georgia and Jacksonville, Florida. Some agents reported four showings in a day. That compares to one a day at this time last year.
Home improvement companies are still suffering. Homeowners don’t want to invest in remodeling costs if they are not sure they will recover the cost when selling. There is reason for optimism. The corollary companies dependent on the real estate industry are beginning to note some activity, a good sign that the recovery will be permanent.
Home Prices All Done Falling says Bank of America
We have all been waiting for it and finally there appears to be good news starting to come out of the largest ecomony in the world. The green shoots appear to be starting to emerge for the US housing market, could this be the ideal time to get involved in US property investment?
The Team at Gower & Mae have been assessing the US Property market for some time and the pricing and market conditions are looking favourable. Mortgage uptake and approvals are still at all time lows and with many families renting property rather than buying it can be considered an ideal environment for Buy to Let Property Investment. Could the timing be right for Buy to let Investors to venture into the US market?
Large scale institutional investors are coming back focusing more and more attention on the US property market buying up large amounts of foreclosed property stock to hold for ongoing rental returns and future value gains. Just this week we commented on a Washington state based investor that acquired a portfolio of just under 1200 properties in Atlanta for $35 million for the ongoing rental returns it will provide. Many private and institutional investors see the US Property market at an ideal cross roads where value and timing are meeting for the first time since the great depression in the 30′s values are low and rental yields are high, however it must be noted that this environment will not be around for long.
Read below for more information on the market or for details on a current Buy to Let opportunity in the USA see visit our Buy to Let Atlanta page and get in contact with us to be sent current examples of Gower & Mae’s buy to let properties offering low price entry and rental returns of 11% + after all costs and tax.
Thank you for reading.
The Gower & Mae Team
Bank of America probably hopes its economists have this one right.In a new research report on Thursday, Bank of America-Merrill Lynch mortgage strategists and economists boosted their forecast for U.S. home prices this year. They now see prices squeezing out a 0.5 percent gain. That doesnt sound like much, but it is up quite a lot from the banks older forecast of a 3.5 percent fall in prices this year.”More information has come our way since the initial forecast, including favorable developments on the policy front, better economic data and a decline in the supply of homes on the market,” wrote Chris Flanagan, Michelle Meyer and Ryan Asato.
“We have therefore updated our home price model and believe that prices are bottoming now”
“Readers with functioning memories will immediately recall that economists have been getting housing calls wrong early and often — before, during and after the housing bubble and crash. At one point, remember, it was gospel that house prices would never fall. And we have seen calls of housing bottoms again and again since prices began to fall back in 2006.
Today the Wall Street Journal once again wrote of signs of life in the housing market, but they also said: “Home prices have yet to hit bottom.”The Bank of America economists are a little more optimistic, though they still dont see prices rebounding any time soon. After basically flattening this year, prices will rise just 0.3 percent in 2013, according to their forecast. And it looks like price gains this year will steal from prices in future years: Theyve cut their 2013 price-gain forecast to 0.3 percent from 1.3 percent and slashed their 2014 forecast to a gain of just 2.8 percent from 8.1 percent previously.
Housing in U.S. Heals With Starts Near Three-Year High.
March 20 (Bloomberg) — Housing starts in the U.S. hovered in February near a three-year high and building permits rose, adding to signs that the industry at the heart of the last financial crisis is stabilizing.
Builders broke ground on 698,000 homes at an annual rate, in line with the median forecast of economists surveyed by Bloomberg News and down 1.1 percent from a January pace that was stronger than previously reported, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, climbed to the highest level since October 2008.
Gains in homebuilding are benefitting construction-material suppliers like Owens Corning Inc. as the industry heals following the worst slump on record. The jump in applications is a reflection of growing confidence that indicates housing will no longer hold back the economic expansion.
“The housing market continues to recover at a very gradual rate,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, who forecast a 697,000 pace for housing starts. “The increase in permits likely flags further strength in the months ahead.”
Stocks fell as commodities slumped on concern about an economic slowdown in China. The Standard & Poor’s 500 Index dropped 0.7 percent to 1,400.38 at 9:56 a.m. in New York.
The median estimate in a Bloomberg survey of 80 economists called for a rise to 700,000. Estimates ranged from 650,000 to 775,000. The prior month was revised up to 706,000, the highest since October 2008, from a 699,000 pace.
Permits increased to a 717,000 annual pace, the most since October 2008, today’s report showed. They were projected to rise to a 686,000 annual rate, from 682,000 the prior month, according to the survey median.
The pace of homebuilding last month was led by a jump in multifamily construction that indicates demand for rental housing is increasing.
Work on multifamily homes, including townhouses and apartment buildings, last month advanced 21 percent to an annual rate of 241,000. Construction of single-family houses fell 9.9 percent, the biggest drop in a year, to a 457,000 rate.
Both categories saw permits increase last month, indicating the drop in single-family activity will be short-lived.
Building materials-makers like Owens Corning are among companies benefiting as housing stabilizes.
“We have the wind at our back as the economy recovers and housing improves,” Sheree Bargabos, president of roofing and asphalt at the Toledo, Ohio-based company, said on a March 9 conference call. “Growth is anticipated as the US housing market recovers, driven by home affordability, improving home values and home remodeling activity.”
Paul Hylbert, chairman of Kodiak Building Partners in Denver, Colorado, a building materials supplier, said “business is definitely picking up. We are on the road to recovery.” Nonetheless, “we will see some fits and starts,” he said in an interview last month. Sales were up 44 percent in December from a year earlier and 60 percent in January, Hylbert said.
The February homebuilding data compare with 608,800 housing starts last year, up from 586,900 in 2010 and reflecting gains in multifamily construction. The 554,000 housing units begun in 2009 were the fewest since record-keeping began in 1959. During the past decade’s housing boom, starts reached a peak of 2.07 million in 2005.
Two of four regions showed a decrease in February starts, led by a 12 percent drop in the Northeast. In the West, construction fell 5.9 percent. Homebuilding climbed 3 percent in the Midwest and 1.5 percent in the South.
Optimism among homebuilders has been improving in recent months. The National Association of Home Builders/Wells Fargo index of builder confidence held in March at the highest level since June 2007 as sales expectations climbed for a sixth month, figures showed yesterday.
The average 30-year fixed-rate mortgage reached an all-time low of 3.87 percent in February, according to data from Freddie Mac.
A measure of housing affordability a month earlier climbed to a record 206.1, according to the National Association of Realtors. A value of 100 means a family earning the national median income can afford a median-priced property at current mortgage rates.
Federal Reserve policy makers last week said they will continue to swap $400 billion in short-term securities with long-term debt to lengthen the average maturity of the central bank’s holdings, a move dubbed Operation Twist and aimed at bringing down borrowing costs like mortgage rates.
–With assistance from Steve Matthews in Atlanta and Chris Middleton in Washington. Editors: Carlos Torres, Vince Golle
US Property Investment Group sells 1,188 Unit Atlanta Portfolio to private US Property Investor
Atlanta has seen some slow but steady transaction volume in the previous months. The most recent deal is the $35.8 million sale of the Tempo portfolio, a 12-property, 1,188-unit multi-family deal out of the hands of Tempo Properties and into the waiting arms of a private US property investor located in Washington state. The local office of Marcus & Millichap Real Estate Services Inc. represented both the seller and the buyer.
“The long-term investment appeal of the properties in this portfolio is primarily their outstanding locations,” Paul Vetter, a vice president with Marcus & Millichap, said. Andrew Mays, a vice president who also worked on the deal, noted that “in addition to their prime locations, the properties offer tremendous upside through new management, capital improvements, repairs and renovations.”
“The Atlanta apartment market appears to be well positioned for additional declines in vacancy and steady rent growth over the next several quarters,” Vetter said, “as the number of new construction starts remains historically low and prospective single-home buyers face stringent mortgage underwriting, high down payments and stagnant incomes that will keep them in rental housing for the foreseeable future.”
Marcus & Millichap’s internal research also noted that Atlanta’s rejuvenated job market will serve as a main driver for vacancy declines in the city’s multi-family market. In addition to Vetter’s noting that potential buyers face stringent standards, single-family foreclosures in the area remain high, and “the migration of many homeowners to rentals continues to represent a source of demand for apartment operators.”
The previous owner held the US Property Investment portfolio for between 30 and 40 years.
Americas expected to lead global property investment market recovery
Analysts expect a 20% increase in global property investment markets in the second half of 2012 led by the Americas and driven by increased confidence and a release of pent up investor and tenant demand.
A return to better economic growth will be the key to the strength of the recovery, according to Cushman & Wakefield’s latest research report, the International Investment Atlas 2012.
‘We are witnessing increased risk tolerance in the securities and real estate markets. As the economic news firms, particularly in the sovereign debt and banking markets, these trends are expected to accelerate in the second half of the year,’ said Glenn Rufrano, global president and chief executive officer of Cushman & Wakefield.
Cushman & Wakefield anticipate volumes for the year to be little changed overall on 2011, at US$710 to 720 billion but within this total, a potential 20% increase between the first and second halves of the year is expected, with activity picking up due to stronger demand as well as increased investment supply resulting from bank loan sales and recapitalizations.
According to Greg Vorwaller, head of global Capital Markets at Cushman & Wakefield, sustained job growth will be a vital boost. ‘A rally in sentiment should be enough to trigger a steady release of pent up occupier demand for effective, modern space as stalled business plans are put back into action, helping investment, banking and development markets,’ he explained.
‘However even if confidence stays low or a new crisis emerges, property is still going to remain high on the agenda even as tenant demand falls for investors as they look for secure incomes and for occupiers as they look to cut costs and utilise their asset base to its fullest extent,’ he added.
David Hutchings, head of European research at Cushman & Wakefield, believes that London will continue to stand out due to the sheer depth of its market as well as the long term growth it offers.
Investors are also set to look more widely for opportunities this year, some taking on more risk, other re-evaluating what risks they are ready to face. In fact a new hierarchy of targets is starting to emerge as investors look beyond the region or country that a market lies in to better understand its true risks and growth potential.
Vorwaller said that the Americas look likely to see the fastest growth in investment activity again this year, focussed on the US.