Property Search in America – Texas

on Thursday, 7 April 2011. Posted in ,
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Searching in the strength of the lonestar state

 

texasflagThe Plan

I visited the United States in early February 2011 with a view to investing in US residential property. The US property market has been through a terrible time, precipitating the financial crisis of 2008 and the following recession in 2009. Property prices throughout the US are on average 20-25% below their 2007 peak, but in some areas the price drops have been considerably more.

The goal wasn’t just to find cheap housing, but also a market that is likely to recover based on a decent economy and strong migration trends. This would rule out rust-belt areas of the North East or overbuilt places like Las Vegas. We analyzed the long term migration trends and identified several states that had strong population growth to ensure any oversupply is consumed as well as low state taxes and an economy of a decent size to ensure that mortgages are soon possible.

From our several day scan, we identified states such as Texas, North Carolina, Georgia, Florida with varying strengths. The strongest however was Texas, and we decided to go to the most diverse economic region in Texas, the Dallas/Fort Worth Metroplex. A grand name for place big, even by Texan terms.

Dallas/Fort Worth Strengths – from an investment perspective.

The economy.

The US maybe slowing recovering, but Texas didn’t really have much of a dip and continues to grow without much bother. It’s diverse and strong and well placed for a further boom in energy or for continued growth in the agriculture area, or just servicing many of the headquarters of big Fortune 500 companies the most of any major city in the US that enjoy the big airport, low land costs and low state taxes.

The hands-off government

Growth continues and goes forward continually creating vast wealth. Besides our target areas, we also visited Highland Park and University Park, two suburbs of Dallas that didn’t have houses, so much as medium sized castles or attractive public libraries that were actually active private residences. I’ve never watched the TV show Dallas, but I imagine it was set in these suburbs and although I hear it wasn’t filmed there, it could have been.

Dallas Property Investment Weaknesses – from an investment perspective.

Un-distressed

It’s not really distressed. At all. The property market is not especially cheap and although it has come off since the boom, it isn’t nearly as weak as other areas in my opinion. The stock in our target investment range was very limited and typically very poor quality, quite old and in bad neighborhoods.

Dallas ‘ wonderful and terrible soil

Coming from Australia which has some of the worst and depleted agriculture soil in the world, it seemed almost criminal that miles and miles and miles of fantastic rich black soil is covered in vast urban low density sprawl connected by the biggest freeways. It grows things like few other soils. This fantastic black soil isn’t good to build houses on – its very “reactive

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