"The times are a changin''" My mortgage broker likes to quote this line from a famous Bob Dylan song. Actually what he's referring to is the changes in the 'always reliable' UK property market. Problem is, it's not so reliable anymore! Property investing in the UK has stagnated - big time! Building a 'nest-egg' or simply buying a couple of properties to get a bit more income each month is the smart thing and always will be a great thing to do - after all, passive income is the key to becoming financially free. But should we be investing in the UK market?
When I started investing in property some 4 years ago, it was nearing the end of a cycle. The good times were now just 'OK' but I could still make a respectable living doing it, and since the hours I kept were less than two days work a week it was a great lifestyle.
Over the last 2 years or so, and more recently than that, we've all watched as the property market has weakened - prices are falling, mortgage companies are squeezing, interest rates are high, and finance is generally very difficult to get. In a nutshell, the whole market has lost its confidence. I have personally witnessed investors like myself dropping like flies over the last six months; very scary indeed.
About a year ago I started looking at other possibilities. I have connections in the USA so it was only natural I was going to investigate there. There's been a media circus surrounding the state of the US economy of late, some say they're heading for a recession, others say they're already in one. There's no denying they've got some problems to sort out, problems which have a habit of affecting the entire western world and beyond! The property market peaked my interest, as there's been a lot of commotion regarding foreclosures. If you're unsure what that means, basically we're talking about repossessed homes. It seems that American homeowners no longer feel the stigma associated with losing their homes or filing for bankruptcy, and walking away from your debt is the easy thing to do. Bad for the lenders, great for us! My latest trip to the states, I found a regular supply of properties, not one of them over $15000 (US), and quite a few less than $7000! I was literally drooling as I was been driven from house to house!
Now, let's take a look at the strength of the dollar. Did I say strength? I mean the weakness of the dollar! Right now, exchange your pounds and you'll get 2 for 1! That's double your money! I can buy a $15000 property for £7,500 sterling! And it's always nice to know that there's a strong sense of 'renting is good, owning is bad.' This means that, providing you buy in the right area -- and trust me it's not that hard -- then you'll be able to rent out your property all day long.
Conclusion:
I've been in the thick of property investing for a good while now with a decent amount of success. In my opinion, investing in the US offers some of the best opportunities around: where else in the western world can you buy property for less than the price of a second-hand car?! And that can only mean one thing: property prices WILL rise. The UK market has got some 'correcting' to do, and I'll definitely be keeping a close eye on it. But for now I'll be converting my pounds to dollars.
