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Buying in American suburbia compared with Aust

Discussion in 'Property Market Economics' started by D3xx, 28th May, 2016.

  1. D3xx

    D3xx Member

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    There's a plethora of American reno TV shows, bargain property shows, etc. Its well known that houses in the US are often very inexpensive (compared to Aus) outside of the major cities. However i was surprised by how large the typical lot size is in their suburbia.

    In Australia we are told that we must move to medium density living for economies of scale and practicality. Today, wanting a lot larger larger than 500 sqm within 20km of the CBD is considered impractical and even greedy. Yet the quarter acre block still seems to be alive and well in the US.
     
    larrylarry likes this.
  2. barnes

    barnes Well-Known Member

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    Yep, it's one of the reasons for a good buy, at least you get a decent land amount. :)
     
  3. Sashatheman

    Sashatheman Well-Known Member

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    My wife and I like watching those US renovation shows. One of the shows has these two women who buy run down houses and do a major reno on them. Sometimes they buy the houses for something as low as $10k.

    From my understanding, and maybe someone can expand on this, in the US the yearly holding costs ie land and other taxes make holding property expensive. But still buying land and a house for $10k is crazy in my opinion.
     
    Last edited: 7th Jun, 2016
  4. Aaron Sice

    Aaron Sice Well-Known Member

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    "Fixer Upper" is a good one.
     
  5. larrylarry

    larrylarry Well-Known Member

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    Good Bones right? They aim to flip every neglected house in that suburb. Cost for reno around US $100k or more. Profits not that much though.
     
  6. ross100

    ross100 Well-Known Member

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    Yes as Larry said "Good Bones" profit after reno wasn't that much.
     
  7. Mick Butterfield

    Mick Butterfield Well-Known Member

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    From my experience (2 properties in Atlanta) taxes etc. are very reasonable in the US. Any tax paid over there also earns credits here if you ever bring money back.
     
  8. JDP1

    JDP1 Well-Known Member

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    The thing to watch out for there is that a lot stuff doesnt have a lot of CG. and the stuff that does will likely be expensive already. An example would be the struggle streets of america. There is no way something like woodridge or druie in a US major city would show anywhere near the kind of cg the druies of australia have shown. The buyer preferences are a bit different..over there, most would sayas an example, prefer a cbd apaetment in a major city over a house with lots of land in a suburb 30km out..Over time, thr same thing will happen here. its already begun..but its a evolutionary process and ttakes time to get the kind of presence it has in the US.
     
    Last edited: 10th Jun, 2016
  9. Bayview

    Bayview Well-Known Member

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    O/O's can claim their loan interest on their tax returns.

    Once you move outside the congested major cities the prices of houses drop down a fair bit.

    Keep in mind that growth of wages in real terms hasn't increased over there for a few decades.

    We are heading the same way.
     
  10. MTR

    MTR Well-Known Member Premium Member

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    In this State, but some States like Texas taxes are very high.
     
  11. MTR

    MTR Well-Known Member Premium Member

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    I wont speak for every State, but what I have found is land is cheap where I buy, that's why you can have houses on very large land component, does not work the same way as in Australia.

    People in US want very large homes and for example in Atlanta to build new today will be around $90 per sq foot. Land may typically only cost $20K, totally different beast to Australia.

    Same in Florida, at the moment we are looking at a flip, the money is all in the build, size of the house not the land.
     
    Last edited: 10th Jun, 2016
  12. MTR

    MTR Well-Known Member Premium Member

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    ... however, property prices are soaring, because there is so much pent up demand and not enough stock. We are placing offers on properties and there are 30 bids on the table per property that is how crazy it is.
     
  13. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Well there you go.
     
  14. MTR

    MTR Well-Known Member Premium Member

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    Wrong, we are currently playing in various markets in US (lower base/cheaper areas) and it is incredibly difficult to source good properties due to the strong competition. What this is doing is continually pushing prices upwards.

    My 9 Atlanta properties purchased in 2011/12 for on average $35-40K are now worth around $150,000 retail price. I don't know what % this equates to, however I did not achieve this in Australia, even though I been buying in booming markets.

    There are many other hot markets at the moment in USA. The mid west is a tougher market, however there are also areas taking off here too.

    Who are the buyers - the world, French, Chinese, Korean etc/foreign investors, home owners who quality for loans and Hedge funds which buy 1000s on a weekly basis. Hedge funds typically do not buy residential property, however they started buying foreclosure from as early as 2012 and have not stopped, they also see the writing on the wall.

    What I am physically seeing now are soaring rents, as soon as I have a vacancy I put the rent up and I have it rented immediately.

    MTR:)
     
    Last edited: 10th Jun, 2016
  15. JDP1

    JDP1 Well-Known Member

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    Dunno..you may be right...im basing my comments on the 6 years i was there on the ground...
     
  16. MTR

    MTR Well-Known Member Premium Member

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    when?
    2007 the property market crashed went into meltdown, it has well and truly recovered.
     
  17. Azazel

    Azazel Well-Known Member

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    Maybe in the main cities here, but we only have a population of just over 20m. Plenty of them around in the other places.
    They have around 350m in the US.
    You wouldn't easily find a reasonably priced house on a large block near the city in one of the biggest cities.
     
  18. MTR

    MTR Well-Known Member Premium Member

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    not true, for example Atlanta 9th largest city in USA, 5.5 million population. Dependent where you buy there are many areas/suburbs that are crazy cheap compared to Australia, same as Florida population 18.8 million etc

    There are also very expensive multi million dollar homes in both these States.

    As I mentioned you can not compare Australia to USA it's chalk and cheese.
     
  19. Azazel

    Azazel Well-Known Member

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    I knew I didn't write that very clearly.
    Yeah, Florida and NY states have nearly around as many people as we have.
    You would struggle in NY City the same as you would in Sydney.