Have you ever wanted to buy property in the United States but thought that it would be easier just to buy property in Australia? I decided to compare a $100,000 investment in property in any state or territory in Australia with the same amount in Dallas Texas, one of the strongest markets in the US. You may be surprised to see how it can be truly advantageous to purchase property in the US in comparison to Australia.

Let’s focus first on some of the pros and cons of each location.

Australia

Pros:

1. Can borrow up to 80 per cent without Lenders Mortgage Insurance (LMI)
2. Interest Only loans are available
3. Property management fees, council rates and insurance are lower in Australia than the USA and should expect growth over time
4. Good demand in certain markets based on population growth

Cons:
1. Stamp Duty prevents you from using all your investment capital
2. Low rental yields
3. Property prices are high and categorised as some of the most unaffordable in the world
and Focus on growth to gain returns
4. Negatively gearing properties are considered a (tax) benefit
5. Requires a substantial amount of time to see growth generate into Total Equity
6. Small relative population.

USA

Pros:
1. Very affordable market
2. Low interest rates if you can get financing
3. Large population as well as population growth
4. Hi rental yields based on being a renting society and tight financing policies
5. Cash flow positive from the beginning
6. Should expect growth over time.

Cons:
1. Maximum 70 per cent financing (for the time being)
2. Loans are Principal and Interest not Interest Only
3. More than 9000 miles away.

The numbers reflected in the table below are very genuine and accurate. I used a recent investment property purchased for my wife last year for the Australian figures. This property is in Fletcher, NSW just outside of Newcastle. Albeit she had benefited from no Stamp Duty on her investment but those days are now gone.

From the above figures, at the end of your first year of investing $100,000 in the property market, which position would you rather be in?

A) Australia: Cash flow negative to the tune of about close to $5,000 with a total equity position of $80k-$86k (depending on which state you invest in).

B) USA: Cash flow positive to the tune of about $11,000 and a total equity position of about $106,371, about $6,000 more than what you started with because your loan requires principal payments.

S. Gregory Uehling is Director and Principal of Tandem Uehling. He is a dual Australian/USA citizen who has lived in Australia for the past 11 years. Greg has had his own Australian based Proprietary Limited Company for over 8 years with financial planners and accountants topping his client list. Greg visits the US regularly while providing his tailored services to his customers in Australia. Tandem Property USA is a wholly owned brand of Tandem Uehling.

Greg can be contacted at 1300 854 431, info@TandemUehling.com.au, www.TandemPropertyUSA.com or follow him on Twitter @TandemProperty

Rents are rising while interest rates remain low, yet young Americans are still largely choosing to rent instead of buy.

Home rent costs have jumped 14 percent since 2010, and are expected to rise another 3.3 percent this year, to year to an average of $1,161, according to commercial property tracker to Reis Inc.

Real estate agent Joan Kamens said high student loan debt is preventing adequate debt to income ratios required by lenders for a mortgage.

Lifestyle habits are a significant contributor as well, she added.

“Millennials are getting married later in life than previous generations, and a sense of urgency to purchase comes with stability, marriage and growing families,” said Kamens, an agent with Coldwell Banker Hearthside in Newtown, Pennsylvania, near Philadelphia. She is also the mother of two 20-somethings.

According to a recent Goldman Sachs study, 30 percent of millennials consider buying a home important but not a priority.

So when will the next generation start to buy houses? Kamens said it will happen once they’re more established in their careers and family, and “when education for children becomes a factor, they may settle with less for the convenience of quick travel time to workplace.”

Neeta Mulgaokar, a real estate agent in New York with Mirador and a millennial, stands by the trend.

“Many of my clients are saying, ‘Why would I buy when it’s so expensive? I could use that money for something else like travel or starting a business.’ ”

Another big factor is the transient nature of the generation’s preferences coupled with the technology that supports their habits.

“Many companies, like Ernst & Young, are including remote work options for their millennial employees,” Mulgaokar pointed out.

“Many millennials have been burned or felt trapped by contracts (cell phones, cable, even student loans) and are shying away from long-term commitment,” she said. “They will pay more to avoid it all together.”

The Associated Press contributed to this report posted on CNBC April 14, 2015