Are you searching for information on Buying Property In America As a Foreigner? If so, you’ve come to the right place!
Real estate in the United States continues to be the best asset in 2020 because, despite the stock market going up and down, and other economic instability in this country, it continues to offer steady and consistent returns.
In this article, I’ll provide you with tips on buying a property in America as a foreigner.
How To Get Started Buying Property In America As a Foreigner
2020 has been a huge year but regardless of the ups and downs that we’ve seen in the United States due to covid-19, America continues to be an excellent place to invest in real estate, especially for foreigners.
If you’re currently investing in real estate overseas, the same rules apply when investing in commercial, residential, or multi-family properties here. You should take the time to thoroughly research the area that you plan on investing in before deciding to take the plunge and purchase a property there.
Let’s say that you’re planning on paying cash for a property, in this case, you will have no problem purchasing real estate in the United States but, if you plan on financing a property here with a mortgage loan, you could face a difficult road ahead.
The average mortgage lender in the United States is going to want to see proof of your income and also your credit history. If you don’t have a credit history in the United States, you may want to consider moving here to establish a legal residence, and credit history, before applying for a mortgage loan in the United States.
Even after you’ve moved to the United States, and established legal residency here, along with credit history, you still may find that your lender challenges your foreign assets.
If you plan on using money that’s been gifted to you by a friend or family member, for the purpose of Buying Property In America As a Foreigner, you will need to write a gift letter verifying the foreign assets, then transfer that money into a domestic bank account in the United States at least two months before you apply for a mortgage.
Mortgage lenders like to see that funds have been ‘seasoned’ in a bank account for at least 60 days before they approve a mortgage loan so it’s always best to follow through with the steps that I’ve mentioned in this article regardless if you are a foreigner who plans on buying a property in the United States, or you’re a United States citizen who is planning on buying a property in this country.
Even though it’s going to take some work to get established in the United States before you can buy property in America, your efforts are going to be worth it because these steps could potentially save you having to pay tens of thousands of dollars more over the lifetime of your mortgage loan.
Let’s say that after owning your property in the United States for a few years you decide to sell it. In this case, you need to know that thanks to the foreign investment in Real Property Tax Act, you’re going to be expected to pay taxes at a rate of 10% which are charged on the gross sale price of the property.
The Internal Revenue Service has this requirement in place because they want to ensure that all foreigners who sell properties in the United States pay their taxes at the time that those properties sell. Once the taxes have been paid, you can apply for a refund but it could take up to 18 months to get that money back.
Which Types Of Property Should You Buy?
One of the great things about investing in real estate in the United States is that there are a wide variety of properties that you can buy including the following:
Land Lots – Since raw land is always in demand, it makes sense to purchase land lots in the United States because it’s always possible that the land lot that you purchase tomorrow could be in demand by another investor who wants to develop that land into a residential housing development, or a strip mall for businesses.
Mobile Homes – Besides raw land, mobile homes have also been an excellent real estate investment over the last 10 years because, manufactured homes offer the flexibility and convenience of single-family properties with the big difference being that the owner of the mobile home park typically pays the water, sewer, and trash for the property.
The great thing about mobile home parks is that depending upon the location where the park is located, most mobile home parks are very affordable and it’s quite possible to find a mobile home that costs less than a single-family home in California.
Self-Storage – If you visited the United States in recent years, you’ll know that this country has an affinity, in most cases, for purchasing two of everything including flat-screen televisions and other electronic devices. This also means that as we accumulate more stuff, most people don’t always have the extra space to place their overflow items and this is where Self-Storage comes into play.
Since most self-storage facilities in the United States charge a minimum of $50 per month, if you own a 100-unit self-storage facility, you can earn up to $5,000 per month, form one storage unit, so it makes sense for every investor to consider adding self-storage to their portfolio of investment properties.
Multifamily Properties – Last of all, but most important, is my favorite real estate investment in the United States, multi-family properties. I prefer multi-family properties, and suggest them to anyone who is interested in Buying Property In America As a Foreigner, over single-family, and other real estate Investments.
Multifamily is in more demand in the United States than ever before because everyone needs a place to live and people from across all generations want to live in multifamily properties. When you combine these factors, it makes sense for every investor who wants to enjoy consistent income to consider investing in multifamily.
The key to success with investing in a multifamily property is to hire a property management company as soon as you purchase your first multifamily property. This is going to save you the time and hassle of having to manage your investment property yourself while ensuring that the most qualified tenants are found for Your investment property.
Contact Trier Capital
At Trier Capital, We do all the hard work to find and acquire ideal properties, and then oversee asset management after purchase, while our investors sit back, relax, and receive tax-advantaged passive cash flow.
To learn more about our process for sourcing, acquiring, and managing multifamily properties, or to speak with me about partnering with my private equity company, contact me today by clicking here, or by calling (630) 229-2383.