Top 5 benefits in investing in real estate in USA

Dec 30, 2019 | Blog

If you are planning to invest in property in the United States, there are many benefits awaiting you. Here are some of the major reasons why you should invest in real estate in the United States.

1. High returns on investment

As long as you choose the right kind of property, there are plenty of ways to find good returns on your investment. The value of real estate generally improves over time. If you are looking for safe investment, then real estate in USA should be your main target. The political stability in the country is also another reason that people from within and outside the country want to invest in real estate in the United States.

1.1 Stable economy

The United States economy is performing well. Unemployment rates are low, industries are booming, and people are constantly looking for new growth opportunities in personal and professional matters. This makes the time right for property investment in the United States.

1.2 New developments

New construction projects tend to open up opportunities for investors. As such, you can invest in some of these new projects. This is another reason people from different countries are eyeing investment opportunities in the US real estate sector.

2. Pricing

If you would like to invest on a budget, there are plenty of premium options for you. You could buy residential property, commercial estate or industrial property for investment. Each type of investment requires a different budgetary consideration. If you would like a steady source of passive income for years to come, then investing in apartment complexes and dormitories is a good choice. If you have greater budget or you are looking to invest in commercial property in a smaller city, you could purchase and rent out shopping complexes, retail spaces, office buildings, and similar establishments. Industrial real estate is also a good choice for investors who want the best returns on their investment. You could choose workshops, warehouses, and other industrial infrastructure for investment.

2.1 Best cities for investment

Apart from the type of building, the location is also important. In particular, California has been a favorite destination of investors over the years. The state is known for its beautiful beaches, vibrant cities, and thriving economy. It is home to some of the most iconic cities in the world, be it Hollywood or Silicon Valley. If you look up a list of the best cities in the USA for real estate investment, you will find a few Californian cities on the list. Residents here look for affordable housing or rental properties, so for investors, these cities are a good choice.  Los Angeles is home to the rich and the famous, so if you want assured returns on investment, this might be a good option. Cities such as San Diego and San Francisco are also prime investment destinations. Apart from these cities, investors also find many properties that fetch good rental income in some of the smaller cities of California.

2.2 Fix and flip properties

If you are looking to make maximum profit on your investment, fix and flip style properties could be a good idea. The strategy would be to locate a property that you could purchase within your budget, renovate it, and put it back on the market. This method could help you save money on the purchase, but you have to keep other factors in mind. Mainly, you would need to consider how much you can spend on the renovation, how quickly you can sell the property, and various other factors.

3. Expert assistance

For foreign investors, unfamiliarity with the market can be a deterrent to overseas investment. However, if you plan to invest in the United States, you can find many types of experts ready to help you. They can help you identify target properties. They can verify the property location, condition, and other important factors, so that you need not travel to the United States every time you need to inspect property. Tax attorneys will explain the taxation laws to you and help with processes such as tax restructuring. You can also hire people to help you with other types of paperwork such as opening a bank account in the United States. Even online forums can help foreign investors learn more about the investment options in the United States.

3.1 Green card

The United States welcomes immigrants who contribute to the country’s economy. One program that attracts investors is the offer of citizenship for immigrants who contribute a particular sum toward building a business in the United States. The EB-5 program is aimed at investors who invest at least USD 500,000 in the country and generate jobs for a minimum of ten people. The country is also home to immigration attorneys who can help investors learn more about eligibility, investment requirement, and other factors.

3.2 Property manager

If you do not reside in the United States but rent out property in the country, then property management could have been a major issue for you. However, thanks to experienced property managers who take care of the property on your behalf, you can now own apartment buildings, dormitories, retail outlets, office buildings and similar properties even if you are not residing in the United States. The property managers will look after the building for you and even collect rent on your behalf. They will report the earnings to the local tax authorities and pay the tax due on the rental income, so that you need not worry about these aspects.

4. Financial assistance

Even if you are a foreigner, you can still find loan programs to help cover the property purchase and renovation costs. While many banks would be cautious about lending money to foreign investors, owing to the greater difficulty in recovering dues in the event of default, some lenders in the United specialize in loans for foreign investors. What is more, the loan covers different types of properties. While loans cover part of the payment, you would still be expected to make a down payment.

4.1 Residential property

You can find loans for purchasing a residence for yourself. These loans work more like typical bank mortgages. The United States offers many different types of residential real estate, from stately heritage mansions to modern apartments in busy downtown areas. Purchasing the right property would give you a base from where you can launch other ventures in the United States, be it business or career.

4.2 Commercial property

Loans can help you purchase commercial property that you either resell or rent out. Commercial property includes everything from apartment complexes to shopping malls and office buildings. Commercial property brings in greater rental income, and would be the investment of choice for many foreign investors.

4.3 Hard money loans

When traditional loan arrangements are not adequate, you can look for hard money loans to help you invest in property. Though these loans carry higher interest rates, many investors choose these loans when they need to purchase property quickly, do not have sufficient credit score, and are reasonably sure of getting good returns on their investment. These loans are typically short term, unlike the 30-year mortgages that banks offer.

5. Welcoming destination for foreign investors

One of the reasons for the popularity of the real estate sector in the United States is its openness to foreign investment. Investors from various countries, including Canada, Australia, and China are investing in prime real estate in the United States. While there are certain regulations that foreign investors must follow, such as not purchasing property located next to sensitive security installations, on the whole, the property market in the United States offers many options to foreign investors.

5.1 Paperwork

The paperwork for the property purchase and registration becomes easier if you use the assistance of experts such as attorneys and realtors. Depending on the type of property you purchase, additional paperwork may be required, such as for those who purchase farmland. That said, the paperwork is not overwhelming and foreign investors report as good their experience with the property investment process.

5.2 Investigation

To ensure the best returns on investment, it is important to perform due diligence on the property. The property value before and after renovation, expected maintenance costs, rental income, and other factors are important. If you live in another country, you can find online calculators to help you estimate these costs. You can work with a team of real estate agents and other specialists to locate the best real estate on sale.

5.3 No need for residency

Even if you do not reside the United States, you are welcome to invest in the country’s real estate market. This is a huge benefit for foreign investors who want to capitalize on the investment potential offered by the United States real estate market.

These are some of the major reasons people choose to invest in the United States real estate sector. For foreigners interested in purchasing residential or investment related real estate, the United States offers good economic climate, variety of options, and many benefits to facilitate investment.

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