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Why US Real Estate Attracts The Most Foreign Investment

When it comes to investments, US Real Estate is a top destination for investors, foreign and domestic. As such a politically and economically stable country with a growing population, US real estate assets enjoy constant demand for housing and commercial space. A strong legal framework with well-established property laws protects investors and helps create a safe and secure investment environment. By investing in US real estate, these investors are protecting their assets from potential economic or political fluctuations in their home country. Foreign investors in US real estate view the US as a stable economy, one that isn’t tied to a particular commodity such as the Middle East or South America may be tied to oil. Many of these investors want to invest their money in the US market because there is an understanding that the law here goes, whereas at home the laws may change - often without rhyme or reason - leaving their investments vulnerable to the somewhat unpredictable scruples of their leaders or politics.

Real Estate provides diversification to portfolios, these assets generate high returns and provide a stable cash flow, an attractive option for passive income generation. The US has a high-demand for rental properties, with multi-family enjoying 95% occupancy rates and yields average 7.7%. The US Real Estate Market has the potential for higher returns. While property prices can be higher in certain areas of the US compared to other countries, the potential for long-term growth and profits is often greater in the US.

Compared to many countries, foreigners can invest very easily in the United States, in the same way as residents. In the last ten years, foreign real estate investors have purchased more than $1 Trillion worth of US real estate. US lenders specializing in foreign national mortgages offer long-term fixed-rate mortgages at competitive rates for non-resident foreign investors (with no US credit) and US Newcomers on visas. The ability to secure mortgage home loan financing and lock in low-interest rates with a 15-year or 30-year mortgage (based on investor needs and preference) without needing an established US credit history truly makes the US a perfect place for foreign real estate investment.

Overall, the US real estate market offers a stable, transparent and potentially profitable investment opportunity for foreign investors, making it one of the most attractive markets in the world. And while there are no additional taxes, or different forms of purchase for foreigners, it's important for foreign investors to take advantage of certain strategies to avoid estate, gift and sales taxes. Foreign individuals and entities who sell U.S. real property interests do face extra taxes (such as FIRTPA taxes) but there are certain exemptions and procedures that can be followed to minimize this tax burden. Some strategies include structuring investments through partnerships or REITs, utilizing tax treaties, conducting thorough due diligence during transactions and utilizing various other tax-friendly structures. Bachi Partners helps clients to select the right structure and the right markets for their portfolios in order to benefit from the specific asset classes, locations, tax structures and financing incentives that fit their needs.


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