The world’s eyes are on the USA at the moment, following Donald Trump’s election last year. Since then, the Federal Reserve has raised interest rates multiple times, a vote of confidence in the American economy. That confidence has spread to investors, with the USA the most popular destination on TheMoveChannel.com among overseas buyers for five of the first six months of 2017.
According to the National Association of Realtors, foreign buyers spent $153 billion on residential property in the USA in the year to March 2017, up 49 per cent from a year ago and a record high.
Indeed, even despite the strong US dollar against other currencies and controversy surrounding potential changes in immigration laws, US real estate remains attractive for investors, as the market continues to build momentum, prices continue to rise and rental income remains impressive. Some markets, such as Silicon Valley, Los Angeles and Phoenix, may be heating up too much for investors to enjoy as strong yields as a few years ago, but places such as Detroit and Florida continue to offer appealing opportunities.
Coming to America in 2017? As the new year looms, we round up the best property investment hotspots you should be considering.
1. Michigan: Detroit
Share of TheMoveChannel.com enquiries in 2016: 19%
“Sales and prices in Detroit have been rising for the past 12 months,” says Global Investments Incorporated CEO Mike Moodie. “We see the election of Mr Trump to be great news for the city and our current investors, as he is pledging to bring the motor industry back to Detroit and has pledged to bring federal funding to the city in the form of schooling, housing, roads and the general infrastructure. Detroit was built on the motor industry and this can only bring jobs and make the economy stronger.
“Three years ago the average price we were selling a home in Detroit was $15,000 and we are now selling homes at $35,000. With this great news we can only see prices increasing, which makes it a great time to get involved now before prices start rising and returns start falling.”
2. Maryland: Baltimore
Share of TheMoveChannel.com enquiries in 2016: 4%
“High opportunity and relatively low home prices make Baltimore one of the hottest real estate markets in the nation,” says Jay Walsh, Chief Operating Officer of ABC Capital Investments, LLC. “Market rents increased 10 per cent over the last 4 Years, so you can have some of the nation’s best cash flow margins.”
3. Florida: Miami (Residential)
Share of TheMoveChannel.com enquiries in 2016: 25%
Florida is an undisputed hub for international investment, thanks to its thriving lifestyle and tourist industries, which mean there is an abundance of buy-to-let opportunities. Miami, specifically, accounts for an impressive 50 per cent of all foreign transactions in the state. The area sees 40.7 per cent of its transactions carried out in cash – almost double the national rate of 22 per cent. (Cash sales correlate to international demand, as overseas buyers tend to purchase properties in all cash.)
Limited supply and strong demand has pushed up median sale prices for single-family home up 14.5 per cent in the last year, increasing from $262,000 to $300,000. Miami real estate prices have risen for more than four straight years. Despite this trend, though, Miami properties remain at 2004 pricing levels – a bargain compared to other global cities.
4. Texas: Dallas
Share of TheMoveChannel.com enquiries in 2016: 14%
One of the fastest growing cities in the USA, Dallas’ economic health is evident from its impressively low unemployment rate. That continues to draw people to the city, boosting its population and driving a strong rental market. Leading employers in diverse industries, combined with the globally connected Dallas International Airport and no state income tax, make it an attractive hotspot for domestic and overseas buyers alike. Indeed, home values in Dallas appreciated 12 per cent in the year to September 2016, according to Zillow, one of the highest annual growth rates among the USA’s 35 largest metros.
5. Pennsylvania: Philadelphia
Share of TheMoveChannel.com enquiries in 2016: 7%
Philadelphia is the USA’s fifth largest city, with a popular that’s grown 10.2 per cent between 1999 and 2014. Over 4 million visitors annually travel the city, while over 25,000 new jobs were created in 2015, notes ABC Capital Investments, LLC. As a result, demand is high, with a residential vacancy rate of only 2.9 per cent, and home prices have been driven up 10 per cent this year.
6. Ohio: Toledo
Share of TheMoveChannel.com enquiries in 2016: 5%
“Detroit and Ohio have been our biggest selling product in the last few years,” says Mike Moodie, CEO of Global Investments Incoporated. “Toledo, Ohio, has started to come under the radar as an investment hotspot due to the quality and availability of Section 8 homes on the market. Section 8 is a common name for the Housing Choice Voucher Program, funded by the U.S. Department of Housing and Urban Development. Section 8 homes have always been the preference of overseas investors due to the security of the rent payments. Rental vouchers and rental certificates are administered locally by public housing agencies.
“While there are many viable property markets in the US, Toledo investment property provides investors with a steady and comprehensive value-added platform that takes advantage of Section 8 housing and the benefits it has to offer investors.”
7. New York: Buffalo
Share of TheMoveChannel.com enquiries in 2016: 10%
“Buffalo’s economy has seen significant improvement and growth since 2010,” Global Investments Incorporated’s Group Sales Director, Jonathan May, comments. “Rather than wait for industry to return, Buffalo no longer relies on a single industry or sector. It has taken a diversified approach and now is the home to industrial, light manufacturing, technology and service-oriented private sector companies that will ensure it has economic growth and stability well into the 21st century.
“Buffalo investment properties offer one of the most steadiest property markets in the USA offering investors incredible low priced buy to let property.”Google+