US Jumping in the US market in 2018

What aboit the dogs

 

Oh I know that's the hard part.

Will be looking for a dog sitter while I am away unless I can get family to look after them

 

Advise to investors considering US as a destination - it is not too late.
In fact the best is ahead.
Looking at the 4-5 year horizon...

 

Dog sitter worked for us

 

I agree.....hate him or love him Trump effect is working wonders

 

www.pawshake.com.au

 

yup same woofff - we're going sailing.

 

Omg doggie heaven

 

Hi guys. As a newbie with only Aussie IP experience, I put together a rough P&L for rental income and capital gains based on what I know so far of US homes. Can you see if I’m missing any big items:

1) Annual Property Income:
Rental collected less outgoings:
- tenant management
- assessed tax (akin to council tax)
- mortgage interests (if relevant)
- income tax to IRS and ATO (with credit from IRS)

Other overheads:
- annual audit fees (us)
- audit fees (aus)

2) Capital gains:
Selling price less:
- buy price
- rehab costs
- buyer agent fees (if any)
- solicitor fees (both buy and selling)
- listing costs and selling agent fees
- cap gain to ATO

Cheers
Eric

 

Hi Eric,

Predominantly correct, but a few minor missing items.

1) Outgoing calculations should also include Insurance, Maintenance and vacancy. Normally you may wish to add 1 month as vacancy in a year only as a contingency.

2) ATO and IRS have a dual tax treaty which allows you to NOT pay any Taxes in Australia for the US income you have earned, as long as you have paid taxes to IRS (which are lower).
But you would need to disclose this Foreign income to ATO, even though you will not be Taxed again by Australia Tax office.

Cheers,
GC

 

Ah yes, maintenance and insurance. Of course.

Vacancy - I look at Zillow price/tax history and sorta work out the time between "Listed for Rent" and "Listing Removed" as the vacancy period (good yardstick?)

Did not know that. I have some US stocks directly through a brokerage. The dividends are withheld @30% in US. But I pay tax to ATO anyway claiming credits for the US tax, like one would on franking credits from Aus stocks. Thanks for the heads-up, i've been doing it wrong AND slightly overpaying!

 

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Beautiful home, built 2005. Wonder why it's taking them so long to sell (306 days and still on market). They have dropped the price multiple times throughout 2017.

 

Good yard stick yes, but maybe too complicated on one hand.

In general, when you hold a sizeable portfolio, vacancy factor moves closer to 1 month in a year. This is the industry average for residentials. Many factors can affect that as you know, for e.g. if your PM believes he/she can get you 1000 per month for a property that should only list for say 850 pm then the property sits 'on the market' not due to less demand but because of bad marketing expectations....

 

One reason only - CMA - Comparable Market Analysis
Just checked - the neighborhood is selling at mid to high 300s.
This one is over-priced at 470K.
Americans are very price savvy.

They will tell you the Australian market (Sydney in particular) is in a "Hyper Price bubble"!

 

Quick question... How did you guys end up in the market you ended up in? Interested in the research, filtering criteria out of 50+ capital city markets

 

In my case, I did some research on a market I saw potential in, then contacted a number of people operating in that market and went from there.

 

Good thread

Have read a little bit about US property over the years on somersoft and its always the same old suspects - atlanta, texas, florida

US is huge, im thinking there must be a 1000 places that you could safely invest?
Wouldnt be looking for gains as such, more interested in high yields. 15% plus
We have a place in broken hill thats 14% yield but im thinking theres probably safer cash flow plays in the US? Safer in terms of it being in a town that you are 99% sure will still exist in 40 years!

So for all the gurus - karina, andy, mtr, gc - are tge markets you play in a result of endless research or was it more you just found a place that worked and went for it?

What is a reasonable expense ratio yardstick to use over there 35-40%? Obviously the lower the rent the higher the expense ratio..
Cheers

 

In my case, I find like I was stuck in analysis paralysis doing endless research. After researching options and talking to other investors, I started talking to companies offering properties. I then made my decision from there based on my budget etc.

 

Been doing a bit of research. Happy to look at smaller towns for a higher yield (as long as they are growing. 20,000 people plus)
Interested in real low end stuff that requires a reno. Will go over there to check the towns out to avoid any ghettos

 

Ohio is one option for that strategy