Unlike some countries across the globe, the United States is quite welcoming of foreign investment into their property market. Land sales are not restricted solely to residents and overseas buyers can make a real estate purchase in much the same way that a US citizen would.
Some states may have their own individual laws, and the relevant associations and cooperatives that control certain areas may impose limitations, but, on the whole, investing in the US property market shouldn’t be an issue for a UK resident. Of course, partnering with a trusted company like Aspen Woolf will further ensure a smooth investment process into what is once again a market on the rise.
Thorough research is key
As with any big investment or purchase, the time that you spend doing quality research will be paid back multiple times over. If you are not already familiar with the neighbourhood in which your prospective property or development falls, this should be your first task.
Location, location, location may sound like old hat these days, but it’s still just as important now as it ever was. After all, what’s the point in putting your money into Mississippi if all the canny cash is going into Orlando?
Find a good lawyer
Buying a property overseas is not without risk, so having a decent independent lawyer on your side who knows the state’s legislation can prove to be invaluable. A good lawyer will be able to advise you on the best way to purchase your property, be it via a LLC or personal structure, and they’ll help you avoid any unnecessary tax implications too.
Even some of the real estate jargon used can be confusing, as one part of the country uses different terminology to another. So, having a local representative to help with such matters will make navigating your way through your real estate purchase that much easier.
The majority of property purchases in the US market made by overseas buyers tend to be cash payments; however, this naturally will not suit everyone. Obtaining a mortgage within the US from overseas can prove to be problematic, but it is not impossible. That being said, the process can take an extraordinarily long period of time and you may also be limited to only borrowing around 50 to 60% of the real estate’s value.
Another thing to bear in mind when financing your US real estate investment is the exchange rate. Fluctuations in the relationship between the pound and the dollar can seriously affect how well your investment performs. Therefore, it is always advisable to borrow in the dollar wherever possible as this will nullify any rise and fall in the foreign exchange markets.
The majority of property purchases made in the United States are freehold, but you may still have to pay extra in certain instances. Compounds and gated communities are examples of where you may find yourself paying additional fees similar to service charges in the UK. These are generally referred to as HOA (Homeowners Association) Fees.
Consider property management
As you will be investing in property outside your country of residence, it’s probably prudent to think about having someone look after the property for you in your absence. Property management companies offer this service and they will take care of everything from collecting rent through to dealing with any issues that may arise while you have a tenant in your property.
Seek out reviews or, better still, get personal recommendations for property management companies in the area that your property is situated. Having a reputable management company onside will give you welcome peace of mind when renting out a property abroad.
Speak to the professionals
If delving into the overseas property market seems a little too daunting to tackle all alone, we’re here to help. As an investment broker that specialises in overseas property we take a lot of the hassle out of what can be an extremely profitable, yet confusing, market. So, if you’d like to find out more about investing in the US property market, give us a call so that we can discuss your options further.
Did you enjoy this blog post? Then perhaps you might like to read our “A Guide To Investing In International Properties“