US hot property for Indian buyers

[prasad1]

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An extra home in the suburbs of Delhi or Bangalore was never enough for them. Flush with cash and keen to diversify their portfolio, Indians are busy snapping up property in the US.


And they are not Indian-Americans, but Indians from Delhi, Mumbai, Bangalore and Hyderabad, who are picking up single-family homes and condos for vacation or just investment.
Indians are among the top five international buyers of residential properties in the US, according to the latest report of the National Association of Realtors released Monday.


The US residential real estate business was worth $928.2 billion in the year ending March 2012, of which $82.5 billion - 4.8 % - came from international buyers. Indians accounted for 6% of this $82.5 billion.


They are buying mostly in Arizona, Nevada (Las Vegas), Florida and California. And most of these transactions, said an Indian-American realtor, were in cash. All of it, up front.

Yashwant Raj, Hindustan Times
Washington, June 12, 2012

 

[biswa]

A good place to park black money. The Indians are just now catching up with the Chinese. Of course we don't know how eager Americans are to sell their lemons.

 

[mahakavi]

Well, I believe the report. Recently a relative of my wife visited us from Mumbai. I was taking him for a walk around the neighborhood. He was impressed with the houses and the relatively low prices (per square foot) compared to Mumbai real estate. He asked me what is the mechanism to buy property in the US. I told him he could buy without problem but how is he going to manage it? He has to rent out the property and pay management fees regularly. With all the problems associated with an absentee owner it was not quite viable, I told him. He must still be ruminating on that. For one thing real estate prices have crumbled almost all across the US and there is no guarantee it is bound to pick up soon. But when those wealthy Indians (many of them are in the finance industry) from India have spare cash to invest let them take the risk. All it takes is one market crash in Mumbai and these guys will be jumping out of their high-rise apartments. They are going with the flow right now. The fund investors from the US who invest in India and other Asian stock markets are so fickle that in 24 hours they can go through various markets and crash them in sequence.

 

[prasad1]

A good place to park black money. The Indians are just now catching up with the Chinese. Of course we don't know how eager Americans are to sell their lemons.

It might be black in India, but it is green when they invest here.

 

[prasad1]

Well, I believe the report. Recently a relative of my wife visited us from Mumbai. I was taking him for a walk around the neighborhood. He was impressed with the houses and the relatively low prices (per square foot) compared to Mumbai real estate. He asked me what is the mechanism to buy property in the US. I told him he could buy without problem but how is he going to manage it? He has to rent out the property and pay management fees regularly. With all the problems associated with an absentee owner it was not quite viable, I told him. He must still be ruminating on that. For one thing real estate prices have crumbled almost all across the US and there is no guarantee it is bound to pick up soon. But when those wealthy Indians (many of them are in the finance industry) from India have spare cash to invest let them take the risk. All it takes is one market crash in Mumbai and these guys will be jumping out of their high-rise apartments. They are going with the flow right now. The fund investors from the US who invest in India and other Asian stock markets are so fickle that in 24 hours they can go through various markets and crash them in sequence.

Yes it can happen, but in 3 years house prices in Guregoun near Delhi has gone up 100%. In last 10 years prices in Jaipur has gone up 10X. So there is real money to be made in India, but the Indians are smart they are diversifying and US market is a safe bet, as downside risk is minimal.

It is easy to generate 10% return cash-on-cash, even after paying 15% (management+maintenance). So it is good place to park, and there is upside potential of appreciation.