Buying cheap US properties – beware!

Is buying cheap property in the United States an astute investment decision or risky business?

Investing in far away places has it’s inherit risks, but we also know the bigger the risk, the bigger the potential reward may be. Investing in the US property market is no exception and seems to be the thing to do for Aussie investors this year.

Lets not beat around the bush, the US economy is poor, well its worse then that, high unemployment, out of control government spending and interest rates at almost 0 point to an economy that may struggle for many years to come. Not to mention the real threat of a double dip recession which would wipe out investors as fast as you could say ‘global financial crisis’.

If you are considering investing there, no matter how cheap a house may seem please take head of a warning made by Rupert Murdoch, one of the smartest business people around. He recently warned that the US economy will be at a standstill for almost a decade and will not start growing again until the small business sector starts to recover. 

Murdoch has also warned that the upcoming presidential election in 2012 could worsen the situation.

“There’s humongous unemployment. At least 30 million are either looking, given up looking or have half the job they had before. And it will get worse,” Murdoch said in an interview with the Australian Financial Review.

“America never gets a recovery without small business starting up in a big way. They are the ones who employ people.”

“Big corporations, they just cut or buy out the competitor. People who take a mortgage on their house to start a business, maybe employ 40 people… now they think, let’s wait and see.”

“People are terrified they will be the next to be unemployed.”

Murdoch also hit out at US president Barack Obama, accusing him of refusing to listen to advisers and business leaders.

With more unemployed and a further 3 to 4 million houses predicted to go into foreclosure, it’s best to stay clear of the USA.

For more information on investing in property, educate yourself with our online property courses.

Source: Michael Yardney

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