Investors of US 'bargains' beware
News from Domaine.com.au:
Australian property investors risk losing hundreds of millions of dollars after snapping up thousands of US housing bargains at forced-sale prices, experts have warned.
Emboldened by the soaring local dollar, Australians invested about $600 million in US residential property last year, according to the Washington-based National Association of Realtors, as overseas buying of US housing doubled.
But consumer advocate Neil Jenman predicts thousands of Australians will lose their money after unwittingly buying undesirable property.
''It's going to be a calamity, for sure and certain,'' he says.
Many investors are being lured by agents promising unrealistic rental returns of up to 20 per cent.
Investment experts who spoke to The Sun-Herald, warn that swaths of properties for sale are in bad neighbourhoods where it would be almost impossible to get a tenant, and even harder to get your money back if you later decided to sell.
In the past six months, Australian companies that help investors buy US residential property have reported a surge in interest.
Property Planning Australia's Mark Armstrong advises potential buyers to do their own ''on-the-ground'' research.
Mr Selleck warned of a further 3 million foreclosures during 2011.