It seems the crazy investment spruikers are running wild again, only last week I saw smiling Australian investors buying houses in the USA for the price of a car!
Yes, the latest hot investment craze is buying cheap US properties by the dozen.
This is somewhat of a well worn path. Investors, or gamblers, have often chased distressed or vulnerable assets, giving rise to the phrase, “in disaster there is opportunity.”
Often, when the unsophisticated and naive find themselves chasing deals that seem too good to be true, the phrase, “in disaster there is more disaster,” seems more appropriate.
And to take advantage of the unsophisticated and naive, the unscrupulous spruikers have emerged like vultures. Facilitating an entry into an investment few people know little about, in a country with completely different laws and regulations to ours.
A look across several websites offering these ‘opportunities of a lifetime’ reveals no financial regulation of any form; the people selling the houses to Australians are also the ones offering to finance the deal.
Conflict of interest, maybe?
Even worse, what’s being sold is claimed to offer amazingly high rental returns, but when you actually dig further into some of the properties – they’re empty. If you can find a tenant willing to pay those suggested rents, good luck.
In the mad rush to buy, people are firstly forgetting the economic conditions in the US and secondly, the extent particular markets – California, Phoenix, Nevada and Florida – have been overbuilt.
Thousands of properties sit empty, in regions where the economy has been trashed – so where are the tenants coming from?
And this is just one of the many investment land mines awaiting potential buyers of these properties.
I suspect you’ll be watching the sequel to this story in 2-3 years time on A Current Affair.
And there won’t be any smiling faces.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. If you’d like help with your financial future, we ‘re one of only six fiduciary financial advisors in Australia.
