Property Investments in the USA

For most of the 20th Century, North America has been the most powerful nation on earth with a GDP far greater than the majority of other countries. With this came an unstoppable property market; investors were buying up land and houses all over the country. In 2008 this took a turn for the worse, and property prices came crashing down as the country slid into recession.

Since 2009, the US has seen a record level of property repossessions and bank foreclosures resulting in a dramatic drop in house prices (as much as 70% in some areas) resulting in many owners finding themselves in a position of negative equity.

In 2012, whilst the country is out of recession and the economy is in recovery, the housing market is still creating distressed sellers. When a homeowner can no longer afford to pay the mortgage, the bank purchases the house, and then sells it on, typically at well below market value.

For property investors, this has created an opportunity. These properties are already valued at more than the purchase price, and as the economy recovers, they will also grow in value. Whilst these properties grow in value, many investors are renting their properties on the private market, or gaining assured rental via the various government backed housing programmes.

The US Department of Housing and Urban Development (HUD) have a federal assistance program dedicated to sponsoring subsidized housing, more commonly known as Section 8. Section 8 assists low-income families all over America to live in affordable properties by providing monthly rent assistance (usually 100%) paid directly to landlords.

The bank owned properties are sourced by local companies and are refurbished in strict accordance to Section 8 guidelines before being offered for sale to investors normally with a Section 8 approved rent paying tenant living there or ready to occupancy. This particular investment vehicle is ideal, benefiting the investor by providing monthly returns as well as capital growth in the asset.

We are however beginning to see foreclosures and negative equity on the decline, as well as massive investment into areas from US government grants exceeding $4 billion with a view to stabilising the market within 3 years of its conception a year ago. Surely now is the time to take advantage of a market that will disappear as corrections to the recession are achieved.

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