The US property market is one of the most in-demand places for international buyers - but is it a simple process to buy a property in the US? Turns out, there are a number of obstacles that can make purchasing a US property more difficult than you might think …
What is the US property market like?
Right now, the US property market is in the middle of what experts are calling a ‘housing boom’. Unlike previous ‘bubbles’, where prices have risen quickly before plummeting down, it’s predicted that the housing market is in the middle of a more sustainable period of price rises. That’s both good and bad news for people looking to buy. Even though it is getting more and more expensive to buy US property, it seems as though rising prices aren’t likely to go away any time soon.
How much does a typical property in the US cost?
Property costs vary greatly across the US and the biggest factor that affects the price is their location. In popular areas like New York City, demand is constantly higher than supply, meaning prices are continuing to rise year on year. Philadelphia is also in the middle of a housing boom, as prices rose by 13% in 2020 and look set to have risen by the same again by the end of 2021. House prices in Chicago, the US’s third-largest city, are following a similar upward trend.
Even though it’s difficult to find a typical price for the entire, incredibly diverse property market, Statista suggests the average property in the US costs around $408,800. And, if you’d like to purchase in an in-demand area, it’s not unusual to pay over $1 million for very modest premises. For the typical condo (apartment) in Manhattan, prices are currently sitting at around $1.2 million.
Can non-US citizens buy property in the US?
Technically, non-US citizens can buy property in the US, but it’s a very complex process that you’ll need expert help to navigate. If you don’t live in the US, you’ll be considered a ‘nonresident alien’ and, without signing the right documents, could have to pay up to 30% tax on any rental income. On top of this, you could be liable for management fees, local taxes and state charges - potentially significantly reducing the value of your precious purchase.
Routes to buying US property
Like the sound of purchasing a US property? There are a number of ways to grab your share of the international property market.
1.- Purchasing property on your own
For the average person, it’s difficult to buy a home to live in, let alone another property that could generate rental returns. As a result, most people feel that buying a second property outright is completely out of reach.
There are also lots of factors that make buying a property in another country difficult, whether you’re set on the US or not. You’ll need to find a solicitor with experience in handling property transactions to complete the complex purchase process - potentially in a language you don’t speak fluently, or perhaps at all.
And if you’d like to rent the property out to get rental income, you’ll have the entire burden of finding tenants and collecting rent on your shoulders. Worse still, if anything happens, you could potentially have to deal with the problem of having thousands of miles and a language barrier between you and your tenants.
2.- Putting money into a fund
Another way to get into the US property market is to put your money into something like a Real Estate Investment Trusts (REITs). However, this isn’t particularly affordable and is pretty complicated for the average person to do. Some platforms only open up this option to accredited investors (mostly High Net Worth individuals), so they’re just as inaccessible for most. Working directly with a specialist property company instead helps you overcome most obstacles to international property purchases …
3.- Purchasing property with a global real estate specialist
One of the best ways to cut out the biggest obstacles to buying international property is to use a platform like Bricksave. You can access a range of curated properties across some of the US’s most in-demand markets. We’ll handle all of the administration and legal hassle, meaning you can simply make your purchase and sit back. Bricksave also finds and manages tenants, allowing you to enjoy a share of rental income without any stress.
If you’d like to get started on your real estate journey with Bricksave, find out more about how it works.
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