US real estate firm sets sights on Kenyans

By MORRIS ARON

A US property company - Realty Capital Inc - will from next month open its doors to local investors seeking to own property in the US where thousands of properties are being offloaded into the market - some at prices cheaper than local ones for similar typed property-following the effects of the subprimemortgage crisis.

The move follows the realisation that investors seeking to cash in on the low pricing mostly lack the facilitation to invest in the US where properties that were foreclosed are going at market rates lower that the local pricing.

"Quite a good number of the United States properties are at rock-bottom prices," said Joseph Wang’endo the Kenyan representative of Realty Capital Inc.

"This presents a good opportunity for investors looking to own property either as second homes or even for rental income."

Realty Capital Inc will assist local investors in identifying properties in areas such as Texas, Arizona and Florida where property prices are at an all time low following the devastating effects of the subprime mortgage that saw hundreds of houses repossessed by financial institutions after the owners failed to meet their mortgage obligations.

In the recent past, banks and other lending institutions have been forced to unload thousands of foreclosed and other repossessed properties.

In addition, hundreds of thousands of small – mostly community banks and credit unions all over the US due to the financial crash in 2008 – that did not get financial bailouts that the major banks did are busy recovering ground by offloading property to remain alive.

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"With all these institutions having tons of non-performing loans in mortgages, car loans, student loans have had to start selling off their assets including homes in foreclosure, short sales, repossessed property at well below their original values with replacement costs being well below what it would cost to replace it in today’s market," said Wang’endo.

"This is an opportunity that Kenyan investors cannot miss."

In addition to a number of advantages, investors intending to own property in the US are not required to pay stamp duty neither does the rental incomes attract tax if they leave it in the US.

Meanwhile, the poor performance of the United State’s property sector has been dealt another blow by an economist who says that Australian property is as much as 60 per cent overvalued and could see the same type of crash that occurred in Japan over 20 years ago.