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Property in the USA is cheaper because they have more tier2 cities.
I’ve said it before multiple times until its just as cool to live in Nowra, Orange, Port Macquarie as it is Sydney, housing=expensive in Australia.
This said regarding property taxes……you have to remember property taxes in USA is different to council rates in Australia.
Its is the main format that USA cities fund police/municipal services/schools etc.
For example I live in a modest apartment building here in Brooklyn Heights, New York. We have 6 apartments in our building (our apartment is the largest at 2br/2bth 160m2 – the other 5 are 1br or studios).
Our buildings annual budget is $60kpa and over half of that goes to city taxes (eg $30k). The other $30k covers everything else eg heat/water/gas/repairs/building insurance etc etc
So for my wife and I our portion of the monthly bill is a little over $2k a month or $24k a year.
Its high and we also have a city income tax bill of 3%pa of wages/salary etc but that $24k a year pays for everything that the city provides eg police/schools etc and we are ok with that…..lol though wish it was lower etc etc but it does make it expensive as a property investor to actually make a ROI on investments over here once you take property taxes into consideration (as a matter of interest our federal is 19% and state 6% + the city 3%).
Basically a good rule of thumb is city taxes is around 1% of the property value per annum (eg our apartment is worth about US$2.4m). Some cities charge more (a lot more eg 3%) some charge less.
I hope that answers your question on property taxes and why they are high.
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This reply was modified 5 years ago by
DeanCollins.
Loans that are a Fannie or Freddie 30 year fixed can still not have pre-payment penalty
Likewise a Freddie or Fannie loan from any of the major banks should still be non-recourse.
Non-recourse means you can walk away from the loan by giving up the property in a short sale and not owe anymore, obviously you lose your equity but most loans in the USA are limited to the value of the property (unlike Australia…..where the banks have you on the hook for everything they are short after sales/expenses).
We’ve refinanced for lower rates twice over the last 8 years since we first purchased for lower rates (and once to acquire the apartment downstairs to do a combination). Apart from about 9 months when we first did the 2012 duplex combination we’ve paid extra every month with no penalties (around about $1-2k extra a month) with no pre-payment penalties with either Chase/Wells or BOA.
Anyway not really important, just never understood why USA banks allowed 30 year fixed loans you can pre-pay as much as you want.
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This reply was modified 7 years ago by DeanCollins.
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This reply was modified 5 years ago by
