Can Non-Residents Buy Property in the USA?

Can Non-Residents Buy Property in the USA?
Yes, Non-Residents from any country can buy property in the United States and even get a mortgage if needed. Mind you, not every country, but it's rare, there are a few considered dangerous to the United States. Maybe 1 or 2 in the middle east, but not much more than that. It's an extremely great opportunity for people from other countries really. On the other hand, this is debatably a bad situation that the United States have put themselves in. But this doesn't discount the opportunity foreign owners have here, they are very lucky. Many countries do not allow such, keeping land values and rental properties for citizens only which keeps them affordable to their income.

Yes it's created amazing wealth for those that owned property throughout the years but now new home buyers are being priced out. Competition from foreign cash buyers have been increasing at enormous rates, especially in the last 10 years. A good amount of these foreign owned homes are actually left vacant and held as investments, but even banks and funds do that. Either way, supply vs demand is the overall influence in prices. Now, If you're reading this as a Non-Resident, this is an insanely good opportunity to take advantage of.

This Issues with Allowing Non-Residential Investments

Problems with real estate

In basic, if you don't own a home already in the United States you're probably along the idea that prices for homes are insane. Overall it is attainable in the $200k range and below still. However you may not be too happy with the area these homes are in. In more desirable areas with the most jobs, safety and good schools homes can be upwards of $500k minimum. Even land in these areas are quite high in the city, great deals still exist for land but to make passive income on land you have to be more creative. 

It's estimated that around 65% of Americans do own a home but new buyers are down in percentage, prices are quite high let's be real. In the metro areas alone, about 15% of the non-resident population owns a home in the Untied States. That's 15% of the real estate off the market for new home buyers. This obviously creates scarcity and drives prices up. This is the outcome of allowing foreign investments and why other countries block it, putting their residents first.

United States citizens are being priced out more and more. The Non-Resident buyers are increasing at a massively rapid rate too. Why is that? Well it's because of the massive opportunity Non-Resident investors have with this. You simply can't blame them. Troves of investors from China, India and more are cash buying properties in the United States and it's only going to continue. Here is why...

Currency Diversification 

Starting in 2022 especially, we have seen some wild currency issues in a lot of countries. Take a very historically stable country like Japan, in 2022 alone their currency has declined over 20% against the dollar. Then you have horrible stories of countries currencies going to hardly anything. Imagine being in a well off in a country like Venezuela and all your money turns to dust. People were even starting fires with wads of cash because it was so worthless. Venezuela was once a thriving leading world economy years ago. It can happen to anyone and we are seeing it a lot more in 3rd world economies. Honestly we are seeing it even in countries like England, it's a worrisome time when this happens. 

Buying a home or land in the United States secures you into the dollar currency. You can use your native countries currency to buy the home in the US after a conversion rate, but down the line you can sell your home in dollars. If your local currency dropped massively or even went to nothing, you now have a solid investment in dollars to save your butt.

It's a great option to not only see your US home value go up, as it has been, but it allows you to lock into a currency diversification just incase. Historically the dollar has been quite stable and considered the world currency choice of trade. Now, who knows, the dollar could have the same issue down the line so there is always risk, that's why diversification is important. Don't put your eggs in one basket as they say.

Possibility of Visa

This is not a subject we can really promote nor offer any type of legal advice. We don't want to be a part of some visa trick people can use. Overall, this needs to be you that researches it, but we will give you the basics of it. From what we have heard a Non-Resident who owns real estate in the United States have a really good path to visas and residency. 

This is actually not uncommon, this happens in many countries. Many countries promote a path to residency when you invest in their economy. There are a lot of places that offer a long term visa if you invest $250k, for example, into a home or business. With that, a long term visa most usually has a few steps after living there for you to get an even longer one and then permanent residency should you be serious about staying. If you didn't buy a property or have skin in the game as they say, you wouldn't have this opportunity. 

United States Collateral and Credit

It's a lot easier to buy property in the United State if you're a cash buyer. Meaning you can buy the property completely in cash without a mortgage. Now say you moved to the United States down the line, you have a line of equity you can take out on your home. Basically you can barrow against the home from a bank with your home as Collateral. It's a bit risky to do that but if could allow you live longer when you don't have an income or using the money to invest. It's a nice perk. 

Credit scores in the United States are very important. Without credit it's hard to get any type of loan from a bank. In order to entice a bank as a foreign investor you will have to prove some substantial support for that bank to give you that loan. However once they do and you make payments over the years on the loan, you will build a credit score in the US. Your next purchase will be much easier and require less down payment. This will allow you to buy more property and grow your net worth in the US. There are several foreign investors that have worked their way to owning 10+ rental properties this way, allowing them to retire early with amazing income. Some even go back to their home country to live very well off this rental income when the dollar goes farther in their country.

Issues Foreign Investors May Run Into 

Now that we have covered the perks of investing in the United States let's go over some things to look out for. 

Issues you may run into are more in the obvious and easy to avoid category. Getting past the buying and mortgage process is the biggest hurdle. You will simply need to contact the appropriate parties using an agent or qualified business to go though this process. 

Before buying you need to understand your tax implication both to the United States and your home country. You very easily could be double taxed and when selling have a way bigger tax than you expect. Rental income will also be taxed, possibly double taxed and you could end up short when covering your mortgage. So get a professional to help you understand your taxes when owning foreign properties.

Property taxes, the United States requires property taxes annually. It's typically a percentage of the value of your property and is subject to annual change. It's also up to you to remember to pay this, counties often won't send tax bills to foreign addresses. Say you bought property and didn't know about this, three or four years go by and you think everything is fine. Next thing you find out is you don't even own your property anymore. The United States grants homes to be forcibly sold to cover property taxes. After a few years the county will auction your home and you can't do anything, all because you forgot your annual property tax payment. Super important to pay these! 

Final Thoughts

Our final thoughts is how lucky are you to have this opportunity if you have the money to do so. A lot of counties don't offer this and if they do it's not that easy for US citizens to buy elsewhere, also not the same ownership security the US provides. Sure there are some places where you can do this method in other countries but many do put their citizens first so they don't get priced out. 

We don't know what the future brings but regardless of what country you are from you may want to take note of the instability in currencies throughout history. A lot of people are aware, buying international properties, bitcoin and more because they don't know what will happen. 



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