ATLANTA
The volatility of the South African currency is perplexing for investors that desire to invest abroad . Currently , the rand is at 14.5 for each U . S . dollar , which appears to be a good time to invest outside of South Africa .
As Americans , we don ’ t have these challenges for the timing of currencies and redeploying our wealth . In most cases , we are quite comfortable investing in the safest economy in the world .
South Africa is a great place to amass wealth and with the accumulation of wealth comes your personal responsibility to protect it for you and your family . For many of you , this means investments abroad in areas like the U . S ., Australia and the U . K . It takes a lot of research and vetting of people and areas before you can muster up enough courage to take action .
As I look at other areas of the world for investment , I must admit , I have blinders on . Australia and the U . K . just don ’ t make sense to me . Every country has issues and the most important piece of the puzzle for you as investors is to determine where your money will be safe for a long time to come . And really , when it comes to investments these days , nothing is more important than safety . The biggest point you can make about safety is location of your asset . It ’ s just not enough to buy in a particular country as real estate is local in nature and all areas do not respond the same to market conditions .
International Investors get blinded by cash flow properties and often pay way too much money when evaluating properties based on cash flow .
International Investors get blinded by cash flow properties and often pay way too much money when evaluating properties based on cash flow . You see , your cash flow looks really good on low income housing in the U . S ., but this is only a “ paper return .” That is , it looks good on paper but in reality , the returns are reduced by intensive property management and excessive repairs . Thus , we avoid these types of houses and advise others to seek safety before cash flow .
Most International Investors forget to consider the appreciation aspect of houses in the U . S . because they are so focused on cash flow . Just think of all the misguided investors that acquired properties in cities like Detroit and Flint , Michigan . Have you seen the news in Flint ? Due to inept government , they ’ ve poisoned the water supply and lead is in the water . The people are sick , stupid dumbass politicians are in trouble , and they should go to jail . But this is America , and like South Africa , our government acts in criminal ways and then tries to make the citizens look like criminals .
What you need to know : The U . S . has a lot of older cities , particularly in the Northeast , like Niagara Falls , Detroit , Cleveland , Baltimore and many others . The water lines that deliver water to the houses are extremely old , broken down , and most have lead issues . Lead is a big problem in the U . S . and in our extremely litigious country , landlords are sued frequently for lead being in their rental properties . Not only can lead be in the plumbing , it is also in the paint used in houses built prior to 1978 . This should concern you if you ’ re buying houses in the U . S . built prior to 1978 . There is an extremely high risk of leadbase paint in these houses and you can become subject to a lawsuit at some point .
How do I know ? I was sued over twenty times for houses I owned 15- 19 years ago in New York State ! I haven ’ t owned a house there in over 13 years and these lawsuits while in my opinion were frivolous , I had to retain counsel and defend myself . Big issues for landlords .
It ’ s going to get a lot worse as the government always looks to assign blame to the private sector . A good idea for all investors is to avoid some of the Northeast cities that are falling apart and never buy a house built in the U . S . before 1978 . These older cities are not gaining population in the U . S ., they are losing it as baby boomers continue to retire and move to the Southern States where the cost of living is lower and the quality of life is higher .
For free consultation and comparative market analysis on any US property
Contact RJ Palano Director of Acquisitions www . BuyCashFlowProperties . com ( 813 ) 495.3006 RJP @ BuyCashFlowProperties . com
www . reimag . co . za MAY 2016 SA Real Estate Investor 55