While there is a lot of fear and a sense of dismay concerning foreign investment in many people living in the USA, it remains a viable option. As a matter of fact, the United States has been crowned and christened as one of the countries that have the greatest numbers of foreign investors in the real estate market.
According to the Department of Commerce at the Bureau of Economic Analysis, over US$ 450 billion was pumped into the US economy. Real estate investment does not only benefit their economy but also helps in developing it. Foreigners who get a chance to engage in this business reap a lot of benefits, including; getting an opportunity to build a great portfolio, which increases the chances of attaining permanent citizenship, among several others.
However, this business brings with it a number of challenges, especially if you do not intend to pitch camp in the United States. Now, let us venture into some of them and how you can successfully manoeuvre through them.
Even if some Expats start considering investing in real estate in Vietnam, the majority of them is still more comfortable investing overseas such as in Europe or the US as those markets are more mature and less volatile.
Having Little Knowledge about the Real Estate Market in the US
Many foreigners have flourished in this field, which corrupts the minds of other non-citizens that making it in the USA’s real estate business is pretty straightforward. Well, the people, who managed to be at the top, have had to be acquainted with the rules and regulations surrounding this murky business. This is because, in very many ways, their market is unique from your home country.
Among these rules and regulations include: An administrative task of 30%, without adding any deductions, is posed on any property(s) gross income for a non-resident. In consequence of this, it is evident that your yield will not be pleasant as you wanted it to be. One of the structures to go for is to form a local Limited Liability Corporation and buy the property through that establishment. It is recommended that you carefully analyze which structure of purchase is suitable for you, before making that wide investment stride.
Apart from the laws, other issues differentiate the USA’s market from others. For starters, most countries consider houses located in the suburbs to be worth a fortune but not in the United States. It is not that the property around this side is not ideal, but be rest assured it will not attract any conceivable number of buyers.
Real estate experts say that Americans are very reasonable people, but not when it comes to the law. So, they can sue you for almost anything. The solution for this is to get an insurance cover that will have your back in case you find yourself lost in the corridors of justice.
How expensive is Property in the United States?
Before, foreign real estate investment in the USA was meant only for those with a quick buck. This is because you either purchased a whole set of property or unite with other financially stable investors and buy property together. This saw people cowering away from the business. The house price index release by Moody’s is one of the main index investors are following to get an overall of the average price of real estate in the US.
Thanks to the ever-developing field of technology and the legal structure, fractional investing in US properties has been put into action. This, in simple terms, means that as a non-resident, you can now buy a segment of property worth the amount you are comfortable with.
Not Possessing a Bank Account in the United States
In the US, most banks do not welcome foreign customers, and if even if you succeed in opening up an account, then maintaining it may be a legwork on its own. This is because there are banks that will insist on having a US sim-card, while others will forbid your debit card from being sent to an address that is located abroad.
The perfect solution when it comes to this matter is to go for a regional bank or opt for an entity that can handle your income in the United States and then transfer it to you with ease.
Is Real Estate Investment in the United States, as a foreigner, worth a Dime?
Real estate investment has become better than fractional investing in US properties, especially for the non-residents back in 2018. The best thing to note is that some providers like RealT has provided a great platforms for potential investors to buy fractional properties in a more intelligent yet straightforward way in line with the United States legal system.
With Tokenization of Real Estate:
- They make sure that a property is distributed among a reasonable number of investors so that each can get a good enough income and participate in the decision-making of matters concerning the property.
- Assign a property management team to oversee all the activities ongoing within on behalf of the owners. For instance, finding tenants, managing repairs just to a few.
- Through blockchains, they have ensured that owners do not have to wait for a whole month for income that comes in the form of rent. Rent is collected daily and channeled into each one’s bank account without them lifting a finger.
Wondering about the benefits that come with fractional investing in US properties?
- It is affordable: As mentioned earlier, investing in real estate was pretty much expensive, especially if you are a foreigner. Well, fractional investing enables you to purchase property worth the amount you are comfortable with.
- It speeds up the process of purchasing and owning the property: ‘Truth be told,’ even if you can afford to buy an entire property, the process is quite lengthy and complicated. With the fractional investment, all you have to do is sign a document that indicates you purchased a section property and proceed to earn income from it.
- It enables you to turn your property into cash: Converting real estate into liquid cash is often not pretty easy. However, through the process of tokenization, where an entire property is subdivided so that it sells off quickly, it can make it possible.
- It builds up your portfolio. As a foreign investor, you obviously want to grow in the business. Through fractional investment, you can slowly purchase bits of property, and before you know it, you will be soaring high in the real estate field.
With these and many other benefits, it safe to say that investing in real estate in the USA as a foreigner has never been such a delectable piece of cake. Click here to make your first investment in US real estate
RealT is one of the top leader company on this emerging token industry applied for the Real Estate and has been featured in newspapers like Nasdaq, PropertyObserver, CrowdFund Insider, Citywire… Start today to invest such as many other non-residents who are sky-flying on top of the real estate charts.
Lastly, if you’re keen to learn more about real estate investing in the USA, this detailed beginner’s guide provides a good summary of all the options available to you.