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-   -   Investment property UK vs. US (https://britishexpats.com/forum/usa-57/investment-property-uk-vs-us-928941/)

Peter.st.giles Oct 30th 2019 3:08 am

Investment property UK vs. US
 
Hi everyone

If you had some savings to invest in a second property for return on rent and property appreciation (hopefully!), would you consider to buy in the UK or US and why?

Would be interesting to share some thoughts!

Moses2013 Oct 30th 2019 8:59 am

Re: Investment property UK vs. US
 

Originally Posted by Peter.st.giles (Post 12756118)
Hi everyone

If you had some savings to invest in a second property for return on rent and property appreciation (hopefully!), would you consider to buy in the UK or US and why?

Would be interesting to share some thoughts!


Where in the UK, where in the US. Price vs rental income?
https://cimg5.ibsrv.net/gimg/british...2c569a285c.png
https://cimg7.ibsrv.net/gimg/british...060b4603a4.png

MidAtlantic Oct 30th 2019 11:23 am

Re: Investment property UK vs. US
 
Depends on where you would be living and your status. That would affect tax. In my view it is not a good idea to have rental property 4,000/5000 miles away.

civilservant Oct 30th 2019 12:31 pm

Re: Investment property UK vs. US
 
The US. Because I live here and it makes it simpler for many reasons.

Peter.st.giles Oct 30th 2019 1:28 pm

Re: Investment property UK vs. US
 
Comparing major cities such as London vs New York or LA, rental return and property appreciation value?
There’s property tax in the US depends on the state you live, ranging from 1-3% could easily cost over $10,000 a year, whereas the UK doesn’t really have property tax, council tax is not the equvelent and typically cost £1-2k a year, so is the cost of keeping a property cheaper in the UK than the US?

spouse of scouse Oct 30th 2019 1:34 pm

Re: Investment property UK vs. US
 

Originally Posted by Peter.st.giles (Post 12756369)
Comparing major cities such as London vs New York or LA, rental return and property appreciation value?
There’s property tax in the US depends on the state you live, ranging from 1-3% could easily cost over $10,000 a year, whereas the UK doesn’t really have property tax, council tax is not the equvelent and typically cost £1-2k a year, so is the cost of keeping a property cheaper in the UK than the US?

Tenant pays Council tax in the UK, not the landlord.
In my opinion, buyers of rental property in the UK at the moment need to choose between ROI or good capital appreciation, it's difficult to get both.

Moses2013 Oct 30th 2019 2:11 pm

Re: Investment property UK vs. US
 

Originally Posted by Peter.st.giles (Post 12756369)
Comparing major cities such as London vs New York or LA, rental return and property appreciation value?
There’s property tax in the US depends on the state you live, ranging from 1-3% could easily cost over $10,000 a year, whereas the UK doesn’t really have property tax, council tax is not the equvelent and typically cost £1-2k a year, so is the cost of keeping a property cheaper in the UK than the US?

You really need to look at your budget, see what you can afford and then start comparing two properties in two different locations and analyse the whole market in that specific area (supply/demand, economy etc). Apart from insurance tax and exchange rates, you have the rental culture and do people expect a certain standard in that area of the city? If not, it might look cheap at first but what are the other costs if property is damaged and you have many tenants come and go? Can you claim back money and what about insurance (fire,floods,earthquakes). Unless you live in the area, you might need an agency. Maybe one area offers less rental income now, but there is a new employer creating 1000 new jobs in 2 years time, which will increase rental income over a longer period.........................................

Nutmegger Oct 30th 2019 3:33 pm

Re: Investment property UK vs. US
 

Originally Posted by Peter.st.giles (Post 12756369)

There’s property tax in the US depends on the state you live, ranging from 1-3% could easily cost over $10,000 a year,

Easily! But note that property tax is set by the municipality, not the state. I live near the town line, and the folks half a mile down the same road are paying a totally different tax from mine.

Jsmth321 Oct 31st 2019 2:56 am

Re: Investment property UK vs. US
 
So glad tenants where we live don't pay the property tax, on our apartment the property tax would be around $300 per month, and with high rent, well I think we would be homeless if we had to pay the tax on top of rent.


Originally Posted by spouse of scouse (Post 12756376)
Tenant pays Council tax in the UK, not the landlord.
In my opinion, buyers of rental property in the UK at the moment need to choose between ROI or good capital appreciation, it's difficult to get both.


spouse of scouse Oct 31st 2019 3:04 am

Re: Investment property UK vs. US
 

Originally Posted by Jsmth321 (Post 12756805)
So glad tenants where we live don't pay the property tax, on our apartment the property tax would be around $300 per month, and with high rent, well I think we would be homeless if we had to pay the tax on top of rent.

Same in Australia JS, landlord pays the tax. I have one lovely tenant in the UK who's been with me for nearly 3 years, I recently told him I'm lowering his rent so we go halves in the Council tax. I'm not trying to make myself out to be a saint by doing that, keeping a great tenant happy by helping them out whenever possible is good business sense too.

Wirksworth Oct 31st 2019 3:30 pm

Re: Investment property UK vs. US
 
Don't forget the nasty surprise that exchange rates can do to Capital Gains Tax on a future sale - you can have to pay US tax on a UK property which hasn't gone up in value in £ but the exchange rate has moved against you.
EG £200K house bought today at $1.3 = purchase cost of $260,000 house sold in 5 years time for £200K but the rate is now $1.5 so sale in $ = $300K therefore $40K takable $ gain. There can also be a mortgage currency gain which is taxable.

ddsrph Oct 31st 2019 5:27 pm

Re: Investment property UK vs. US
 
I would look into desirable vacation areas and renting via VRBO or AirBnb. Much more income potential and a place for your own vacation or future retirement home.

mommapudding Oct 31st 2019 8:21 pm

Re: Investment property UK vs. US
 
As a second home (if you own another house in U.K. OR abroad) or buy to let in U.K. Stamp Duty is not to be sneezed at, even if you’re a cash buyer. 8% if valued over £300k. Goes even higher if you hit the next bracket. Many leaseholds in UK desirable areas now have clauses prohibiting short term lets too.
Build yourself a spreadsheet. No quick and easy answer. If you were thinking of using it yourself too, there’s the two week stay limit if you want to take the tax breaks from running it as a business. It gets complicated very fast.





m2m2012 Nov 8th 2019 7:53 am

Re: Investment property UK vs. US
 

Originally Posted by Peter.st.giles (Post 12756118)
Hi everyone

If you had some savings to invest in a second property for return on rent and property appreciation (hopefully!), would you consider to buy in the UK or US and why?

Would be interesting to share some thoughts!

I know a guy who owns 3 duplexes in Northwest Arkansas near Fayetteville, a nice part of the country that's constantly rated in the top five or ten best places to live in the USA. Mild weather, safe and low cost of living. Place is booming with many moving from CA etc. AR has also the most pro-landlord laws in the country. The 3 duplexes are together worth around $400-450K, gross rent is $46K p.a., insurance $3.5K, prop.taxes $3.5K.


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