U.S. Homes

Reporter: Graeme Butler

It's a little slice of the great American dream and it's yours for a bargain basement price but depending on who you listen to it'll be the best or worst money you ever spend.

"Some of these properties have been valued in 2007 prior to the GFC they sold for 300 - $350,000 and they dropped all the way down to $50,000" Sean O'Hare runs a Perth based company selling Houses in the U-S to people in W.A - as the name suggests they're all bank foreclosures and they're cheap... very cheap especially when you compare them to the sort of prices we pay here in Perth. This place for example is selling for about $40,000 it's an outlying area near Atlanta Georgia.

"It's very very seductive for Australians but it's very very dangerous" Aussie real estate consumer advocate Neil Jenman pulls no punches when it comes to his thoughts on US property deals for Australians. "Great question to ask if these American property prices were such a bargain price why aren't the Americans buying them there are 300 million people in America what they've got to come to Australia to find buyers I'll tell you why they come to Australia to find buyers cos in America they can't find anybody stupid enough to get caught in these deals"

Sean why aren't Americans buying them? "They are Americans are buying them in their thousands"

But obviously not enough of them are buying them because they're so cheap.

"Okay sure of course the reason Americans aren't buying them is because generally they can't get finance"

The attraction for Aussie buyers is obvious, a record high dollar against the greenback. Houses for a tenth of the price you'd pay here and claims of high rental returns it's an equation that convinced Mark and Jane Minton to use their private superannuation fund to buy two houses - they're convinced it's a good investment for them. Jane says "I've done my research I'm quite confident I can't see why a lot of people are putting the knockers on it because I've done the research I've shown the statistics will give us our money back in five years. The two that we've got now should give us 15 - 1600 a month income passively and if we could get that up to ten properties there have a $8,000 passive income every month then I wouldn't need to go to work like I do now"

Many financial advisors and commentators like Neil Jenman are concerned that Australians are staring down the barrel of big losses in a market they just don't understand - lured by claims of recent high valuations. But the U-S market has a glut of houses in some areas and they are worth nothing at all. "I have seen a woman buy a property in America for 70 thousand dollars and she can't sell it for 10,000 that's what I've seen"

How much research did you do?

"Lots I've been researching for close to two years including flights to the US and not just this area the whole of the states"

And that according to all involved is the key, do your research. Neil says "if you really want to understand the American property market here's what you must do. You must fly there and check it out for yourself you must speak to local real estate agents you must speak to local attorneys you must speak to local councils and authorities you need to speak to town planners you need to go to the areas yourself and speak to the neighbours speak to the residents you need to speak to other property investors who have bought in America"

Sean says "if investors do just a little bit of research themselves they can find out the true value of these properties and there's so much information on the internet now that they can do their own homework on these properties"

How many do you own Sean? "I own three myself and I'd like to own a lot more"

Neil says "fifty thousand doesn't seem a lot for a house but let me put it to you this way, put $50,000 in cash on the table, that a lot of money my word it's a lot of money and it's a lot of money to lose"

Further Details

www.foreclosedamericanhomes.com.au

www.jenman.com.au