Economic Factors In The USA
The USA offers a number of economic reasons behind the success of its property markets. Below we outline some major factors to bear in mind when considering an investment in the USA.
The USA property market is vast and has many options to suit all needs and budgets, from stand-alone homes to units in condo-hotels.
The current economic crisis has created an ideal opportunity to buy property at low prices. This is especially true in the property hotspots of Florida and Las Vegas, where, owing to climate and excellent leisure activities, the market is likely to remain more buoyant than in the rest of the country.
Low Cost of Living
Predictions for property investment in the USA indicate that the strong Sterling and Euro against the Dollar make for a beneficial property investment choice. The cost of living in the USA is still generally lower than in many European countries and the extensive availability of a wide range of consumer goods makes the USA a retail paradise.
Sound Economy
The USA boasts the largest economy in the world and has long been a stable economic environment in which to invest. Despite a rise in interest rates and the subprime lending crisis having put the brakes on the property market in recent years, the USA still represents a strong market into which foreigners continue to make wise investments, particularly in buy-to-let options, in key locations.
Tourist Industry
There are many areas of the USA that offer excellent tourist facilities, collectively attracting the USA’s annual tourist figures of some 40 million visitors per year. Investors who purchase wisely in tourist destinations rely on a healthy resale market with strong capital growth to fuel their investments.
Rental Market
Spurred on by a strong tourist market, the buy-to-let investment in holiday areas offer strong potential to the rental investor. These areas include coastal regions of the east and west, ski resorts of California or year-round Las Vegas and Florida where investors benefit from the absence of any off-peak seasons. Rental yields in key locations such as Orlando reach 12% per annum, to which investors can add eventual annual capital appreciation upon resale. In addition, internal migration from the north to the south also stimulates the need for long-term rental homes in certain regions such as Florida and Las Vegas.
Capital Growth
Investors are facing the realities of dropping property prices (average 25% p.a.). They are happy to buy extremely low and ride the economic storm, in anticipation of a revival in the market, a situation which, according to many analysts, will inevitably start to take effect around late 2010. Wisely chosen off-plan options give opportunity to obtain maximum capital growth in the long term, boosted by high rental yields over the investment period.
Buying Process
The legal and buying process is highly developed in the USA. The system is easy to understand and transparent, while many of the taxes and specific requirements will vary from State to State.
Cheap transatlantic flights
The wide availability of direct budget flights to the USA from Europe makes property purchase all the more attractive to foreigners. Meanwhile an “Open Skies” agreement is currently being considered to abolish the exclusivity that British Airways and Virgin Atlantic have enjoyed as carriers over the years. This will undoubtedly bring great benefits to consumers and encourage far more competitive pricing.