(PRWEB UK) 21 February 2013
Property investment firm Colordarcy say America’s cheapest place to buy property provides a good example of how cheap property may not necessarily be a good investment.
Loxley McKenzie, Managing Director of Colordarcy said, “Investing in cheap property in America does not necessarily bring the best ROI. Investors could find themselves trapped in areas that may see little growth in a lifetime and, worst of all, no interest from tenants which might also be true in cities like nearby Detroit.
Detroit was a popular location with investors up until 12 months ago, however there are now far better areas from an investment perspective, such as a resurgent Orlando, to consider according to the firm. So it is important to choose location wisely in this vast country.”
The big news at the moment is focused on USA property prices rising again after so many years where it looked like they would not recover for a decade.
US property prices have risen 5.9% year-on-year as an average, however this masks some significant variations around the country.
McKenzie added “It is easy to feel much more positive about the future, and take advantage of that dollar exchange rate to invest in the kind of locations that will give a handsome return.
Unfortunately, these locations are not necessarily the cheapest, because sometimes, cheap areas are cheap for a reason.”
Saginaw was the second hardest hit city in the United States during the housing crash. Homes have lost 53.7% of their value since 2008, to the point where the average price for a property is now just $61,300 (Source: Zillow).
So why are property prices so low in Saginaw compared to anywhere else in the US? According to Colordarcy, the answer is high crime rates and lack of jobs. Saginaw is the most dangerous place to live in the US and it also among the poorest.
Therefore rather than looking at price alone, serious investors, should look at the likely return on investment the property will provide.
A small investment apartment in Orlando might cost more than the equivalent in Detroit, for example, yet prices in Orlando have risen 22% year-on-year in comparison.
The average price of a property in Orlando Metro is $125,600 which is nearly double that of a city like Saginaw.
Orlando may be more expensive but, according to Colordarcy, it has three important things investors should be looking for – a strong rental market, rising prices and an excellent quality of life.
Notes to the editor:
Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Colordarcy investment property portfolio includes some of the best properties for sale in Brazil, Florida, Turkey and the United Kingdom.
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