Investing in property the only way that makes sense

One of my clients asked me yesterday what the buying process is for buying property in the USA? That’s the great thing about investing here; US law is based on British law. The similarities are very distinct.

Solicitor is called Attorney
Property is called Real Estate
Completion is called Closing
Letting Agent is called Property Manager
Mortgage is still mortgage
Freehold title is still freehold title

And since we speak the same language and (in many cases) have the same capitist values, it’s easy to see why buying here is so easy.

It amazes me why investors struggle to buy in developing countries just because it’s in or close to the European Union. I’ve been there!

My first ever property investment was in Riga, Latvia. Sounded great, and in theory it was. I bought a 2 bedroom off-plan apartment near to the centre of Riga. All the economic indicators said this was gonna be a great investment. In those days I was still learning my trade and invested for (or thought I was investing for) capital growth and NOT cash flow…..big mistake and I don’t mind admitting that.

Up and coming countries are excitable and have itchy feet. This means they are more than likely to make fast changes to policy, travel, work, rates, property, planning and everything else you can think of….and their aggresive when they do it to.

My 1-year build time, lasted 18 months and still wasn’t completed, I’m not suprised and you shouldn’t be either. The Latvian government then forced the banks to stop lending to Foreign investors. This meant I couldnt draw the funds down to complete that I had originally been promised (I use the word promise loosly!) I almost lost my entire deposit after nearly 2 years. Long story short, I sold the property to a Latvian friend of mine for my deposit and and a little extra…I was VERY lucky. I was over there at the time and I know of dozens of people who lost a lot of money!

Since then, I only invest in established markets, tried and tested. I don’t invest for capital growth – if it happens, great – if it doesn’t so what! I invest for passive income, cash flow.

Property investing should be simply: what is the NET yield on this property that I buy: (annual rent – expenses/purchase price)

rule of thumb: Buy low, with high yield.

Through the nineties in the UK this was the only way property investor’s got rich. This is still the only way to do it…except now it’s in the USA.