How to Buy Property in the US
One of the best places to invest in real estate is the United States. With its economic growth, stability, and regulatory environment, investing in the US housing market can be a very lucrative venture. The good news is that the conditions are also friendly to a foreigner buying rental property in the US.
Foreign investors don’t need to have a green card or be a US citizen before buying an investment property in their personal name. In addition, the American government doesn’t charge extra stamp duties to a foreign buyer of US real estate.
Individual Tax Identification Number (ITIN) – Even though you don’t have to have a green card or be a US citizen to own real estate, foreigners investing in US real estate are required to obtain an ITIN for filing federal tax reports to the IRS.
Decide what kind of investment property you want
What kind of investment property do you want to own? Commercial real estate is any property used for business purposes. This could be retail properties, shopping centers, office buildings, warehouses, hotels, apartment complexes, even assisted living facilities (ALF). On the other hand, residential real estate could be condos, single-family homes, or multifamily homes. Anything with 5 units or more is considered commercial, even if its tenanted. Explore the pros and cons of both commercial and residential real estate before making a decision!
Select a real estate market
The US housing market is vast and has numerous cities and counties to choose from. To enhance your chances of finding a profitable investment property for sale, you need to select one market and focus on it. Here are some of the factors to consider when choosing a real estate market:
- Population growth: look for an area that records increasing population growth and of course, a high renter population. This shows that the demand for rental property will continue rising.
- Job growth: Find out if new major companies are setting up shop in the city. This could even trigger the migration of new residents from other areas.
- Employer diversity: Avoid places where jobs come from one source such as shipping, oil, mining, or agriculture. If most people are employed in one industry, you will be in trouble if that industry collapses.
- Sometimes the best opportunities are outside of major metropolitan areas
Once you’ve done your research and found the area you wish to pursue, it’s time to identify an experienced local team to represent you. The team should include, realtor mortgage brokers specializing in foreign investment loans, property managers, contractors, insurance agents, and professional home inspectors.
They will also help you verify:
• Overall condition of the home
• The upfront cost of repairs
• Operating expenses
• Cost of insurance
• Professional property management costs
• Property taxes
Having the right team in place will help you overcome the vast challenges and nuances of investing abroad. There are, of course, other ways of owning a piece of real estate without buying a physical property. This includes real estate crowdfunding, Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), and private lending. Explore all of your options before making a move!
