Saturday, March 10, 2012

Marc Faber : Rental Properties in the US a good Investment now

Marc Faber : I travel around the world all the time and I'm interested in the formation of prices so I have an idea about trends in prices. You have to consider real estate prices in the context of currency valuations. For example, five years ago, homes in Australia and Canada were inexpensive and now they aren't, but not necessarily because prices have gone up. Although prices don't necessarily track with whether a currency increases or decreases in value, in those two cases, the value of the currencies also has increased. The US does have areas where real estate is incredibly low relative to other parts of the world. I can buy homes in Atlanta and Phoenix for less than I'd pay in Thailand, and because the GDP per capita in the US is of course much higher than in Thailand, on a relative basis, those homes in Atlanta and Phoenix would be attractive. As a foreigner, I am not interested in investing in US real estate for various reasons, including taxation, management and regulation. But if I were a US citizen, I would say now is a relatively good time to buy real estate and rent it out and net a yield of maybe 6–8%. Many of my friends who own rental apartments do very well on rental income. Many of the people who no longer qualify for mortgages can rent. - in The Gold Report


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