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