The top twenty TV shows in America tell us a lot about where America’s at, and why there’s money to be made for clever Aussies… like me.
People often ask me why I’ve been taking such an interest in US property.
“It’s some tax dodge so you can claim trips to Disneyland, right Jon?”
That is one of the reasons. In fact there’s a lot of reasons, but one of the things that sums it up for me is this – the American TV ratings for 2015.
Now, what do you notice about this list?
To me it looks a lot like the Australian league table. Football comes in at number 2. Then there’s NCIS and a whole range of cop shows. Downton Abbey even makes a showing at number 20.
There’s even the familiar “reality” TV shows – Dancing with the Stars and The Voice.
But what’s missing here?
Yep. Reno TV. Where’s The Block? Where’s House Rules? Where’s Renovation Rescue or whatever incarnation we’re up to now?
(My Kitchen Rules is also missing, but that’s a topic for another time…)
Since about 2003 when Renovation Rescue came on to the scene (though you can probably trace the trend back to Backyard Blitz which launched in 2000), renovation-based television shows have been consistent performers on Australian television.
In many years they were the best performing shows of the year (not counting AFL finals etc.)
What does this say about us?
Well, as the well-worn saying goes, Australians love their properties. I’ve always been a bit sceptical about this saying. Who doesn’t love houses? But it does seem that Australians do have a unique relationship to property.
And perhaps more than anywhere in the world, Australians are tuned into the fact that their house is not just a home, but the most important and powerful asset they own.
The Australian public led the media on this one. Reno TV started out with the idea of “how do we make this property awesome?” But it quickly merged into, “How do we make this place awesome, AND increase its value.”
And this idea gave us The Block, where the capital gain is literally the way winner is decided.
All of this is absent in America.
Well, not totally. But property is certainly not the BBQ stopper it is here. And I’d venture to say that the Australian population is the most property savvy in the world.
This gives us an advantage.
And while there are no renovation shows in the top 20 in America, they do exist. But they have a slightly different flavour there.
For example, Income Property finds households with cashflow problems and shows them how they can build a granny flat or something to generate a little extra income.
Fixer Upper finds crapped-out houses and turns them into gems, helping to revitalise struggling neighbourhoods.
Flip or Flop follows a husband and wife team of ‘flippers’ who find distressed properties, buy them at a discount, and renovate for a profit.
“Flipping” has never taken off in Australia, and I think that speaks well of us. I always see flipping as an immature strategy. It’s like you get in there and renovate, the price goes up and you get all excited and sell.
If you’ve got a solid property, why not keep the rental income and use the equity to keep building your portfolio?
That’s the Australian way.
But this is the nature of American reno TV. It’s about flipping houses for profit, or escaping financial hardship.
It is not about ordinary people finding creative ways to improve the capital values of their homes.
And so to me, it just seems that Australia is further down the road with our relationship to property. We know that any growth we manufacture is not just about the “profit”. The real power is in the extra leverage it opens up.
And its this difference the creates the opportunities for Australian investors in America.
When I’m looking at properties in the US, I often feel I’m the only investor in the game. Maybe there’s a couple of owner-occupiers. Maybe – MAYBE – there’s a flipper, but they need different numbers to me anyway.
And so I’m finding I’m picking up deals where I’m thinking, there’s no way a property with these kinds of numbers would last more than a day on the market in Australia.
But sometimes I’m the only one making an offer.
Add to that some super-cheap buy in points, strong rental returns, and markets that are still emerging from the swamp of the GFC – still entering their upswing phase of the cycle – and you have some excellent opportunities.
My feeling is one day America will catch on. Average Americans will realise the wealth-creation power of property, and American TV will be swamped with The Block rip offs.
Til then, I’m going to enjoy the benefits of being ahead of the curve.
What do you think? Are Australians the most savvy property investors in the world?