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Estero Property Advice That The US Is Becoming A Smart Place To Buy

Monday 20 April 2015, 4:10PM

By Beckie Wright

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For investors seeking certainty and financial security, Lindsay Jarvis of Estero Property suggests that the U.S. is rapidly becoming a smart place to buy and advises that there are several advantages in investing in the U.S. Whilst many investors focus on capital gain, Estero concentrates on income and believe capital gain is something for our children, rather than ourselves. With this in mind, they’ve found the US market almost unbeatable, offering cash ROI's in the 10-20% range as opposed to the meagre 1-4% that many local property investments offer.

This advice from Estero Property becomes ever more relevant as the Reserve Bank now signals its intent to target landlords with their new lending restrictions. They recently announced that they had opened up consultations to examine new lending rules for property investors. In a statement the Reserve Bank said it was looking at a "new asset class treatment for mortgage loans to residential property investors."

Fairfax News also reported proposed changes were to make sure that banks hold enough capital for the risks involved in investment property loans and would bring New Zealand into line with international lending rules, the Reserve Bank said. Reserve Bank Head of Prudential Supervision Toby Fiennes said, "International evidence suggests that default rates and loss rates experienced during sharp housing market downturns tend to be higher for residential property investment loans than for loans to owner occupiers," Fairfax News reported. "The proposed rule amendment is designed to ensure that banks hold adequate capital for the risks that they face from investment property lending," he said. "Partly as a result of submissions received, the bank has reconsidered the definition, and is now consulting on three possible alternative ways to define loans to residential property investors," Fiennes said.

The U.S. is an enormous market, and the team at Estero, specialists in U.S. property investment, have focused their research and analysis on buying in the right areas. “To protect investors from buying p. mortgage fund, which closely monitors economic, demographic and geographical data as part of an assessment of the long term viability of a property.” The result, he continues, is an ability to offer a 30-year loan secured only by the property itself.

Bearing in mind the proposed introduction of lending restrictions aimed at landlords by the Reserve Bank, investors would be well advised to look to the experience of U.S. investors such as Estero Property, so for more information please visit their website at http://www.esteroproperty.co.nz .