Opportunities for foreign real estate investment are wide and varied in the United States. It doesn’t matter where you’re from and what currency you’d use to purchase a property; you have a parcel waiting for you.
There are generally three kinds of real estate investment available to foreigners. These investments include commercial estate investment and residential property investment. Residential properties are classified into single-family properties, apartments or condominiums, and recreational properties. Regardless of what kind of real estate you are interested in, there are all sorts of tax ramifications, financing options, and legal requirements that you have to deal with.
Why Should You Invest in the U.S. Real Estate Market?
You’ve probably heard of the increasing number of foreign real estate investments in the United States. This is not surprising. With the troubles that the real estate investment market faces in the United States, greater opportunities in real estate investment were opened to foreign investors.
With the dollar’s value at its all-time low, foreign investors find real estate bargains throughout the United States. There are no shortages of deals in this market. More distressed properties are being sold everywhere, and foreigners pour millions into buying these foreclosed or distressed properties. The United States real estate has become a fairly attractive long-term investment for foreign investors.
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In November 2006, the National Association of Realtors released a report entitled “Foreign Investments in U.S. Real Estate: Current Trends and Historical Perspective.” The report showed that there had been a steady increase in foreign real estate investment in the United States. This is especially after the euro and the loonie became stronger in the face of the continuous devaluation of the U.S. dollar. Prime bargains were opened to foreigners. Many foreigners have now considered retiring or settling in the United States.
If you’re a foreigner, you will find many reasons to invest in the United States real estate market. Aside from the fact that the floating exchange rate has given you a lot of leverage over the bargaining table, the financial market is a good reason to invest in U.S. real estate.
The financial market in the United States about the real estate market is quite liberal, and the restrictions against foreign investors are pretty reasonable. This is ideal for foreign companies seeking to invest in the real estate market in the United States to avoid tariff restrictions and are considering setting up an office or a company in the United States.
Furthermore, despite the U.S. dollar’s devaluation and the wide foreclosures of many properties, the real estate market remains stable, though slightly shaky, due to foreign investors’ capital appreciation. Domestic real estate buyers may not necessarily share the same opinion, but the market has remained strong for foreign real estate buyers. This may be largely credited to the fact that there is minimal risk for them.
Why are Foreign Real Estate Investments Safe and Profitable?
You can make many investments, but the safest you can make right now is investing your money in real properties. This is another good reason aside from the fact that you can make a pretty nifty profit if you like, particularly now with the widespread property foreclosures and seemingly continuous U.S. dollar devaluation. This is especially true if you use the euro or the loonie when investing.
But why is U.S. real estate investment safe for foreigners?
It is undeniable that stock investments are not a safe avenue at this point. The recession has affected the U.S. economy; the same recession has greatly affected worldwide stock investments. Stock values are dropping. It is also a fact that stock values fluctuate even without the current economic situation.
On the other hand, real estate investments are pretty stable if you compare them to stock investments – or even bond or mutual fund investments. With real estate investment, you’d be putting your money in an investment that would grow in value as years go by.
What are the Benefits of Foreign Real Estate Investment?
U.S. state government supports foreign investments and, along this line, has formulated various tax breaks to encourage foreign investment in real estate. Many of these tax breaks are not available in many countries. Most countries would frown at foreigners owning real properties within their territory.
Foreign real estate investment in the United States is open to everyone. If you can afford to buy the property or comply with the mortgage requirements and payments, you can secure a pretty good property in the United States. Again, this is the perfect chance for you to invest in the United States’ current economic situation.
Another great benefit you can take advantage of is the availability of mortgage financing. Lenders have opened their doors to foreign investors looking into purchasing a property. So you don’t have to deplete your bank account. You can secure a mortgage loan and gradually pay it off.
I’m Canadian. What Are My Financing Options?
There is a steadily increasing rate of Canadian real estate investors in the United States. Accordingly, the government has made certain that they have attractive financing options.
If you’re Canadian – or a foreigner – you’d find a lot of reasons why you should buy a piece of real property in the United States. For Canadians, the parity of the currencies or the U.S. dollar’s apparent devaluation is a good reason. But how do you finance your purchase?
There are various financing options available to you, depending on which state you are in. In Arizona, for instance, you’d get favorable financing terms if you purchase a property for recreational purposes; you do not derive any income or benefit from your purchase or ownership. However, you must sign up for a disclosure agreement and give your loan a 30% down payment. To qualify for a loan, you may be required to show the availability of liquid reserves for three to six months. You may also be required to present a minimum of a 3-month bank statement.