What factors should be paid attention to when investing in American real estate?

First of all, people buy houses, so "people" is the most critical factor. How a local population grows, whether there is a net inflow of population, and whether there are continuous and high-quality foreign and foreign immigrants are all worthy of attention.

If the population of a place continues to move out and no foreign population is willing to enter, then the value of local real estate investment will be greatly reduced.

Take Detroit as an example. Since 1975, the local population has been declining for many years. The World Population Watch Network predicts that the local population decline will continue until 2020.

Population of Detroit Metropolitan Area (Source: World Population Review)

On the contrary, in Toronto, Sydney, Los Angeles and other cities with a net inflow of transnational immigrants, housing has become just the need of new immigrants. For foreigners who have nothing in the local area, the first thing to do after arrival is to find a place to live, so it is inevitable that house prices will rise.

This standard also applies to China. At present, many young people in third-and fourth-tier cities flock to provincial capitals and first-and second-tier cities, which puts pressure on housing prices in third-and fourth-tier cities. If you plan to invest in real estate in these cities, please be careful.

2. Unemployment rate

If you have enough people, you must have corresponding job opportunities, otherwise you can't even support yourself, let alone have no money to buy a house. Low unemployment rate has also become a favorable factor for real estate investment.

The following figure shows the research on the correlation between housing prices and unemployment rate in the United States by MarketOracle, a market forecasting agency. The black line represents house prices and the red line is unemployment rate. As mentioned at the beginning, the current unemployment rate in the United States is 4.3%, the lowest point in recent years, and almost full employment has been achieved.

House prices in the United States are inversely proportional to the unemployment rate (Source: MarketOracle)

It can be seen that there is a significant negative correlation between housing prices and unemployment rate in the United States. The decline of unemployment rate will keep house prices stable and gradually rise.

In addition to the national unemployment rate, you can also find the unemployment rates of States, cities, districts and communities in the United States. As the example in the following table shows, the unemployment rate in Queens, new york is low, so you can find a better local neighborhood and choose to buy real estate.

Investigating the future trend of unemployment rate can predict the trend of house prices in advance to some extent.

3. Exchange rate changes

As mentioned earlier, the US dollar has stepped out of the weak market this year, which is related to the Fed's slight interest rate hike and Trump's "weak dollar" expectation. He hopes to promote American export trade.

Since the beginning of this year, the US dollar has fallen by 6.5% against RMB, and now it has fallen to around 6.48. It is also a discount for us to buy assets when the exchange rate of the US dollar is low. The same is true of the pound, which is currently at a historical low. ?

4. Annual rental rate of return

The annual rental return rate is obtained by dividing the annual rental net income by the total house price (or the total purchase cost). The gross rental rate of foreign houses should be around 6%-7%, because the holding cost may be reduced by about 2%.

When investing in overseas real estate, only a few investors are used for their own careers. Even if they live in their own houses, some people will not move in until their children grow up and go to middle school or university. Therefore, renting a house is an inevitable choice.

Many westerners prefer renting to buying, which makes many foreign properties available for rent at higher prices.

Generally speaking, the rental return rate can reach 5%, even if the income is reasonable, it is best not to be lower than 4%. Of course, the more the better.

5. Public safety and crime rate

When buying a house in America, you have to pay attention to the crime rate in your community. No matter which city you are in, there may be areas with poor public security, and these places should be avoided as much as possible.

There are many similar websites in America, such as Familywatchdog, Trulia, CrimeReports and so on. , you can query the security and crime rate of the community where the house address is located.

Take a villa in Jamaican community in Queens, new york as an example. The address is 81-15 warehampljamaicatestates, NY 1 1432. The picture below shows the security situation of this address on Trulia website. Green stands for safety, and red stands for worrying safety.

Choosing a house in a good security area can also guarantee the appreciation of the purchased property. ?

6. School district

China people are most concerned about the quality of the school district where the house is located, and also about the comprehensive situation of the community. The school district information of American real estate is very clear, and there is a special website (such as GreatSchools) to query, where you can see the ethnic composition of students, students' test scores and many other information.

Take the villa in new york as an example. Its school district is of high quality. The assigned primary school and junior high school are 10 (full marks), and the students are mainly Asian and Hispanic.

The school district primary school PS131Abigail Adams, 10 has a perfect score, which is far ahead of the national average in the national score evaluation.

The students in primary schools are mostly Asian and Latino. Schools with Asians will definitely get high marks and good grades.

7. Community

American community is an important existence, and community culture is prevalent. Therefore, the population, class, environment and other conditions of the community directly affect their own quality of life, the potential of future house price appreciation and so on.

The villa in Queens, new york above is a typical community above the middle class, with multi-ethnic residents and a high proportion of college students. The average annual income of community families is significantly higher than that of Queens, new york and the United States, with a high proportion of owners and superior living environment. ?

To sum up, with the continuous influx of population, reasonable local unemployment rate, affordable housing, easy resale, good public security, and finding a relatively low exchange rate can basically avoid irrational overseas housing purchase.