Why shouldn’t I buy Australian Property for Investment?
Absolutely you should! AU property currently has great capital growth options in many cities and suburbs. If you have enough equity/funds to purchase and can find a great deal, it is always worth considering. US property though is great for those who cannot afford AU property just now, and/or are looking for better Returns on Investment (ROI).
How do I get a tenant?
We have first class Property Management teams based in each location that advertise, interview & screen all applications and get the tenants for you. They will also replace tenants if a tenant leaves at the end of a lease or even during a lease.
What happens if something needs repair at the property?
The property manager will arrange for quotes or repair depending on the cost. This threshold can be set by you. If you wish the property manager to simply attend to repairs they will, otherwise can provide you with 2-3 quotes for your approval first.
How do I know the property is worth the money?
We preform strict due diligence on every property we procure and strongly advise all clients to do the same. We can get solid comparable sales data for homes in the area of similar size etc. and can do the same for rental returns.
What happens to the rental income?
We set up for each client an “escrow””account which is essentially an account held in trust by a US title company for use. All rental returns are deposited into this account by the property manager after management fees, and all costs can be paid out of this account to any US company for repairs, insurance etc. Profit remaining can be wired back to any Australian bank account as often as you wish
Do I have to pay taxes?
Yes, there is nothing more certain than taxes unfortunately! There will be tax payable at the end of the calendar year in the US, and we can recommend excellent accounts in the US to assist with this. Any monies brought back to Australia will also be subject to tax by the ATO, but all taxes paid in the US are taken into account so we do not have to pay tax twice on the same money. Only the difference would need to be paid if you are in a higher tax bracket here in AU than the US. Please see your tax professional or accountant for clarification on this.
Do I need a Social Security number and how do I get one?
No, if you are not a US citizen you are not able to get a social security number (this is the US equivalent of our tax file number in Australia). We can though apply for an International Tax Identification Number as an overseas investor (ITIN). We can help step you through this process and can be done via the US Embassy or via certain professionals in Australia that specialize in this. If you are a US citizen though, this will not be necessary as you will have a SSN already.
Is investing in the US risky?
I reference this as similar to investing in property in a different state within Australia. There is a degree of risk with any investment including real estate, and this risk can be slightly higher when you do not know the market in the area you are buying. For this reason, we do extra due diligence on all properties and have an excellent team of people on the ground in each market we invest in to guide us and advise on any issues. I would also recommend this strategy if you were investing in property in a different capital city in Australia.
What about RefundsWhat about Currency Exchange rates? Wont this affect my investment?
In short, yes current exchange rate changes will affect your investments. The price of the US dollar is hinged to the strength of the US market. As the US market continues to improve the US dollar will continue to rise. Relative to the AUD, if our market weakness we will see our dollar drop in value or if we also strength, then currency rates will stay similar. Essentially if the US dollar rises, then the rental income you receive will also increase. Vice versa if it falls, but also if the USD does fall, then properties in the US also become cheaper for us to purchase. I would not recommend including any changes in the USD/AUD exchange rate in your profit/loss estimates, but yes, changes here will affect our returns.
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