Five good prospects for investing in the US

Five good prospects for investing in the US
Cameron McEvoyDecember 8, 2020

Following up from my first post exploring the pros and cons of US market investment, I've now started to do some initial research into not only the various cities/markets but also the market factors themselves, and how they are different to Australia's.

This is also timely because just a couple of weeks ago, I had the pleasure of being invited by 2GB Radio to attend the 2GB Business Outlook Luncheon in Sydney. Speakers giving presentations to a jam-packed room included TV and Radio finance expert Ross Greenwood, market expert Peter Switzer, and mortgage expert John Symond to name but a few.

Each speaker gave his or her own presentation, referencing slides of recent research and gave top-line “crystal ball” predictions of where (he or she thinks) things are headed. Interestingly, investment in foreign markets, specifically property as an investment type, was something they each highlighted. They said this because each noted our dollar would remain strong against all major currencies until at least 2014, and might even get slightly stronger before going back down again.

So after leaving the hall feeling enthused, motivated, and like the world is my oyster, I read further. This is where the USA bit comes back into it. While there is no question in regards to other markets being ripe with opportunity (some countries within Europe present some very attractive, cashflow-positive opportunities), I remain convinced that the US could be the more accessible, easier to manage remotely and has more potential for growth for property investors looking offshore.

I created a scorecard from about 20 unique website lists of more “reputable” quality, to try and attempt to rank a top five ripe for investment. I must preface my top five by saying that I've done zero scientific, surveyed or mathematical analysis to form this. Instead, I've noted the experts' opinions on four key categories:

1) City's basic prospects for growth

2) Quality of infrastructure and other fundamentals (employment centres, schools, etc)

3) Foreclosure discounts and their succession since 2008 (cities with high median foreclosure numbers)

4) Rental return. In the US, even if your primary interest is capital gain, rental return is vitally important due to the buoyancy of currency exchange rates.

So what came out on top?

Well, my top five are:

1) Pittsburgh, Philadelphia

2) Cincinnati, Ohio

3) Columbus, Ohio

4) Minneapolis, Minnesota

5) Phoenix, Arizona

There are many more variables that I could (and probably should) have taken into account, such as the specifics related to the actual cities themselves, beyond demographic and infrastructure-based elements (for example, unemployment trends and mix of industries/job security).

The jury is still out regarding the US property market. Will it make a full recovery, or only a partial one? Or none at all? And how much lower can prices really go? And will some markets thrive while others perish? These are all valid and important questions. I believe that with extensive research and due diligence, property can be found in the US that is cashflow-positive from the outset, along with having steady capital growth prospects.


Cameron McEvoy is a property investor and maintains a blog, Property Spectator.

Cameron McEvoy

Cameron McEvoy is a NSW-based property investor and maintains a blog, Property Correspondent.

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