Yes, you can afford a home in the US
If you and your family want to become legal permanent residents of the US (get a green card) and you can afford to invest $500,000 (about Sh45 million) in a US Government approved project, you could be living legally in America within six months. This is made possible by the EB-5 visa programme, through which you can choose to live anywhere in the US. It includes green cards for you, your wife or husband, and all children under 21. Your children can attend all American schools, colleges, and universities
As the property boom extends beyond Kenya’s major towns, forward-thinking investors are already considering crossing the border.
The favourite property destinations have in the past been the United Arab Emirates and India, but now the United States of America, reeling under the weight of the worst foreclosure crisis in decades, is beginning to attract speculators.
The biggest incentive for many is the relatively calm political and economic climate, which, when coupled with the going prices of repossessed homes, makes property ownership a real bargain.
Players in the property business say this exodus to the West has been made possible by a number of factors, key among them the fact that banks and other lending institutions have to unload thousands of foreclosed and repossessed properties.
Also, hundreds, if not thousands, of small, mostly community banks and credit unions all over the US, due to the financial meltdown in that country, have failed because they did not get the financial bailout that the major banks did.
And with all these institutions having tonnes of what are called “non-performing loans”, which simply means loans that are not producing cash flow, including mortgages, car, and student loans, they simply had to start selling off their assets, including homes in foreclosure, short sales, and repossessed property.
Most of these are being sold well below their original valuation of only a few years ago, with replacement costs being less than what it would cost to replace them in today’s market.
Also, the low cost entry point (there is no stamp duty payable in the US) has caused an unprecedented opportunity for foreign investors to take advantage of this short-term window of opportunity to purchase prime property.
Joseph Wang’endo, the chief operations officer at Realty Capital, a property agency, says it is now cheaper to buy houses in some parts of the US than in Nairobi.
For instance, a three-bedroom house in a middle-class area of Houston is going for as little as Sh13 million.
The rental income from such a property is between Sh150,000 and Sh180,000.
In Nairobi, a similar house would cost about Sh40 million in Lavington, or Sh12 million in South C, with rents of Sh100,000 or Sh40,000, respectively.
Thus the house in Houston has much higher returns compared to the amount invested.
In fact, some US realtors advertise houses with price tags as low as $30,000 (Sh2.8 million).
There are numerous other benefits of owning a home abroad. For instance, you can claim a number of deductions on your rental property, such as loan interest, insurance, capital works, rates, and depreciation.