Investing in property in America has the potential to result in significant returns if the investment is made wisely. Although the cheapest properties may be tempting for investment, they will not necessarily produce the best return on investment. This is according to recent revelations from property investment firm Colordarcy.
Loxley McKenzie, MD 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 popular with investors until a year ago, but there are now much better areas from an investment angle. These include a resurgent Orlando, according to the firm. The location must be chosen wisely.
Nationwide property values have risen an average of 5.9% annually; however, some areas have seen significantly more growth than others, with certain factors imposing a cap on any potential value.
Saginaw properties, for example, have seen their values fall by 53.7% since 2008, making the average house price just $61,300. Low prices would usually prove appealing for investment opportunities; however, Saginaw is said to be one of the most dangerous and amongst the poorest places to live in America.
On the other hand, although investing in a small apartment in Orlando might cost more than investing in an equivalent property in Detroit, Orlando properties have experienced a 22% year-on-year rise in comparison; the average property price in Orlando is $125,600.
Although Orlando property may be more expensive initially, this market has more potential as an investment opportunity. The current rental market, rising values and quality of life in the area are predicted to result in higher returns in the future.
