The Cheapest Place Buy Property In America And Why Nobody Would Invest There

Cheapest Place To Buy Property In AmericaMy old mum always says, “If you buy cheap you buy twice” however this is not necessarily true for property investors.

Investing in cheap property in America can spell disaster for the unwary, who can find themselves trapped in areas that may see little growth in a lifetime and, worst of all, no interest from tenants.

So it is important to choose location wisely in this vast country.

The big news at the moment is focused on US property prices rising again after so many years where it looked like they would not recover for a decade.

US property prices have risen 5.9% year-on-year as an average, however this masks some significant differences depending on where you invest.

It is easy to feel much more positive about the future, and take advantage of that dollar exchange rate to invest in the kind of locations that will give a handsome return.

Unfortunately, these locations are not necessarily the cheapest, because sometimes, cheap areas are cheap for a reason.

Looking at the latest statistics from Zillow, I was interested to see that despite prices falling by more than 45% in Florida since the boom years, it was not the hardest hit state.

The cheapest place to buy property in America, according to Zillow statistics, is Saginaw in Michigan close to the US border with Canada

The rundown city was also the second hardest hit in the United States during the housing crash. Homes lost 53.7% of their value since 2008, to the point where the average price for a property is now just $61,300.

Yet Saginaw is just 100 miles from Detroit, a city that has attracted the attention of investors due to its low prices.

So why are property prices so low in Saginaw compared to anywhere else in the US?

The answer is crime. Saginaw is the most dangerous place to live in the US and possibly one of the most rundown locations you will find anywhere in the country. There is more chance of becoming a victim of violent crime in Saginaw than virtually anywhere else in the US.

This video should give you some idea of what to look for in a bad property investment location.

Saginaw is an extreme example, and no property investor in their right mind would consider investing in a location where they stand a better chance of getting mugged than making a profit.

Rather than looking at price alone, serious investors, look at the likely return on investment the property will provide.

A penthouse apartment in Saginaw would not offer anything like the same return as a small investment apartment in Orlando, for example, where prices have risen 22% year-on-year in comparison despite the higher price of property.

The average price of a property in Orlando Metro is $125,600 which is nearly double that of Saginaw.

Orlando may be more expensive, but it has two important things investors should be looking for – a strong rental market and rising prices which mean that property will pay for itself.

Next time you find yourself looking for cheap property to invest in, ask yourself one important question, is it really worth the money?

Have you ever made a mistake investing in property? Please leave your comments below.

Kind regards
Brett Tudor

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Categories: America Property Investment / Property Invest


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