Published on 12 December 2005 at 12:02 pm
Filed under: North America:- USA Property Guides » America US Real Estate Investment Potential
The investment potential for a real estate investor in America literally depends on the market sector an investor wishes to target. There are many macro market sectors offering substantial scope for profit, income and growth and it is first necessary to look at each of an investor’s general choices.
The USA has successful commercial, residential, retail, office and industrial real estate markets and generally an investor will look to work within one or more US States to find the best opportunities for his property portfolio. Furthermore there are a number of ways an investor can look to profit - from flipping and wholesaling to buying up foreclosures or at auction.
As with any real estate market the American residential real estate market offers an investor two obvious ways to profit - either from rental returns or capital growth. In many of America’s major towns and cities there is great demand for rental accommodation from low grade to A grade and because the market is so well established it is possible to track realistically achievable rental incomes per property type, per area. With this data to hand an investor seeking to maximize his rental yield can look for homes in need of renovation, homes at auction and homes being re-sold upon foreclosure where bargains can be bagged and yields can be hiked.
An alternative to letting such ‘bargain’ property an investor can purchase, renovate and resell and make capital growth from straight property development but it is essential that an investor understands what constitutes a true bargain. Properties with bad inspection reports or in need of substantial structural work do not necessarily constitute the bargain they initially appear to be. An investor looking to profit in either of these two ways would be best advised to be on the ground and making site inspections in person. Furthermore, as stated real estate market data is readily available in America because the market is so well established, developed and documented so it is possible for an investor to examine a property, calculate renovation costs and then roughly work out the profit margins realistically achievable and determine whether or not the investment in question is a good investment.
An international real estate investor looking to profit from the residential property market in America remotely has options as diverse as buying wholesale in gated retirement communities and letting units or purchasing brand new off plan properties in popular hotspots such as Las Vegas or Florida and flipping upon completion to release the equity growth.
For investors seeking to target any of the commercial sectors from retail to office from light industrial to warehousing there are many property funds and real estate investment trusts (REITs) in America offering an investor a relatively tax efficient way to profit. Or depending on the level of investment capital available an investor can directly purchase units or property to lease back or resell after refurbishment work has been completed.
The real estate market in the USA is cyclical, it ebbs and flows depending on the strength of the American economy, the supply and demand ratio, market value, market rental rates and the time lag between increased demand becoming apparent and effective supply becoming available. As previously stated the maturity of the American real estate market means that much evidence and data about the market is published daily and therefore readily available to the investor. This affords an investor seeking potential in a given American real estate sector the chance to find areas where potential exists or may present itself in the future.
The main advantage of the American property market over any emerging property market worldwide is that it is well established, well documented, consistently in demand and very carefully regulated, governed and controlled which removes many elements of risk. This reduction in risk can also mean that the greatest potential for profit is removed however therefore the American real estate market may not be suitable for all investors depending on what it is they are hoping to achieve from their property investment.
North America:- USA Property Reports
Complete listing of all current property reports for region: North America:- USA
