Why investors should consider debt free US residential real estate investments, now more than ever

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By Jorge Castellar | Bricksave

May 03, 2023

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Over the past 12 months the Bricksave platform has successfully delivered more than 8.2% average net annual rental yields in USD to our clients, paid directly to them each and every month.

We are continually seeking opportunities that offer the best prospects for growth and preservation of wealth and have paid out over USD5 million in rental returns to our investors to date.

Given today’s economic environment, it’s more important than ever that we share our insights on a compelling investment opportunity.

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US residential real estate investments without leverage

Inflation and Weak Currencies

Many countries in the world still struggle with high inflation and now more so than ever. Some currencies have even averaged around 45% annually in the past few years. Inflation erodes the purchasing power of these local currencies, making it difficult for investors to protect and grow their wealth.

Moreover, as these currencies consistently depreciate against the US dollar the outlook remains uncertain and individuals holding their wealth in these countries are losing value every day.

In contrast, the US has historically exhibited lower and more stable inflation rates. Furthermore, the US dollar remains the global reserve currency and enjoys widespread acceptance and stability.

By investing in US residential real estate that yields returns in USD, international investors can shield their wealth from the detrimental effects of inflation and currency depreciation.

US real estate: a safe and stable investment

The US residential real estate market has demonstrated consistent growth and resilience over time, even during periods of economic turbulence. This stability can be attributed to several factors:

1. Strong demand

The US population continues to grow, and demand for housing remains robust. This supports property values and rental income, ensuring a steady stream of returns for real estate investors.

2. Diversification

The US real estate market is highly diversified, with a vast array of property types and locations. This allows investors to tailor their portfolios to their individual risk tolerance and investment objectives.

3. Transparency and legal protection

The US real estate market is characterized by transparency and a well-developed legal system that protects property rights. This provides investors with confidence in the security of their investments.

4. Professional property management

At Bricksave we have built out our own proprietary property management system and have a wealth of experience in looking after investors properties. This means investors delegate the day-to-day management of their properties to professionals, freeing them to focus on their core business or other investments.

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The Benefits of Investing Without Leverage

Leverage in real estate is the use of borrowed money to purchase a property instead of buying the property entirely with one’s own capital

While leverage can amplify returns, it also increases risk, particularly in an environment of rising interest rates. Investing in US residential real estate without leverage offers several advantages:

1. Lower risk

By avoiding debt, investors can reduce their exposure to interest rate risk, as well as the risk of default or foreclosure. This helps preserve capital and protect against potential downturns in the real estate market.

2. Enhanced cash flow

Properties purchased without leverage typically generate higher cash flow, as there are no mortgage payments to be made. This can provide a steady stream of income, which can be particularly valuable for Argentine investors seeking to offset the impact of inflation and currency depreciation.

3. Greater flexibility

Investing without leverage allows investors to capitalize on market opportunities without being constrained by the need to service debt. This can enable them to take advantage of strategic acquisitions or divestments as conditions change.

4. Potential for higher returns

While the initial investment may be larger, the absence of interest expenses can lead to higher net returns over the long term, particularly when factoring in the effects of inflation and currency depreciation.

In summary

US residential real estate investments without leverage present a unique opportunity for international investors to protect and grow their wealth in a stable, secure, and high-performing market.

By investing in properties that yield returns in USD, investors can mitigate the risks associated with inflation and currency depreciation, while benefiting from the robust fundamentals of the US real estate market.

To find out how you can benefit, speak to a member of the team now

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Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.