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Move over Mickey Mouse, US property buyers want B2L investments not second homes

December 2, 2015Article by Charlotte Ashton

The annual Rightmove ‘Who’s buying overseas property?’ report provides a fascinating snapshot of where in the world people are buying property and why. The 2015/16 report shows that in the US this year buyers are all about investment properties, with 46% citing that as the reason for their purchase (followed by 38% for second homes and 16% for relocation).

Size matters

The Rightmove report also reveals that buyers are overwhelmingly in favour of apartments rather than houses: 71% of demand was for apartments, compared to just 29% for houses. Meanwhile 56% stated that they wanted to rent their property out when not in use, emphasising the investment-led demand that the US market is experiencing.

Ray Withers, CEO of specialist property investment company Property Frontiers, comments,

“It’s a great time for investing in US real estate at the moment. There are some excellent returns to be made. Prime markets like Florida and New York remain perennially popular, but there are some really up and coming areas that are generating investment excitement, like the Carolinas. It’s a question of dual income potential, with both capital growth and healthy yields on offer for the right property.”

Oh Carolina

In North Carolina, just 20 minutes from the financial hub of Charlotte, Circle Oaks Village is providing precisely what investors are looking for – turnkey apartments available from just $46,636 with minimum assured returns of up to 18.8% NET on capital invested for the first five years. The two and three bedroom apartments have been fully refurbished and offer an ideal buy-to-let investment prospect for investors looking to be part of the US residential real estate market.

Just across the border in the South Carolina town of Gaffney, which enjoys easy access to Charlotte, Chandler Oaks is another buy-to-let apartment development offering dual income potential. Apartments are priced from as little as $48,671, with contracted income 8% NET underwritten to 2020.

Buyer profile

Interestingly, many of those buying property in the US (according to Rightmove’s latest report) are not those approaching retirement and looking to invest their pension. The largest buyer group by age is those between 45 and 54 (34% of buyers), followed by those aged 30-44 (27%). The figures point to the growing interest in investment among younger buyers looking to make their money work for them through buy-to-let properties. There was even a fair amount of interest from the under 30s, who accounted for 13% of buyers.

Furthermore, just 2% of buyers were planning to fund their purchase with their pension. Cash buyers were by far the most prevalent, at 57%, followed by 35% of buyers taking out mortgages.

Compared to the global snapshot, where 60% of buyers were aged 55 and above, the US market has a clear attraction for younger investors. The global figures also reveal that location is the most significant factor when it comes to buying, with 66% of purchasers citing this as their priority. Price was the second most important consideration, at 19%.

For more information about investing in buy-to-let property in North Carolina and South Carolina, contact Property Frontiers or call +44 1865 202 700.

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