THE RETURN ON INVESTMENT IN REAL ESTATE IN THE UNITED STATES OF AMERICA
Still considered a safe bet, real estate
makes it possible to better measure risk while counting on attractive
profitability.
By opting
for rental and residential properties located in the United States, you benefit
from the privilege of any foreign investor on American soil subject to a
lenient policy and reduced taxation.
REAL ESTATE INVESTMENT IN THE USA:
THE YIELD
To ensure a stable yield, it is strongly
recommended to bet on apartments and houses for rental. Indeed, while the
purchase price of houses and apartments fell sharply after the subprime crisis,
rents did not, which remained stable. While it's possible to buy a home for $
50,000, rents remain high, as it costs on average $ 1,000 to rent a two-bedroom
apartment in downtown Detroit.
What's more,
the country's federal system protects rental investors from the risk of
default. Either way, always entrust the rental management of your real estate
to confirmed experts, established in the United States, thus guaranteeing you
good management of your property and better monitoring. To give you an idea of
what to really expect, here's everything you need to know about profitable US
real estate.
- From the
first moments when you plan to invest in real estate in the USA, you must bet
on a rate of return. This will be the common thread for all your future
calculations, in particular to forecast operational and non-operational
charges. This percentage will also guide you in choosing the location and type
of property you intend to buy. Without forgetting the additional parameters which
are the economic reliability of the chosen state, taxation, the dynamics of
employment in this area, as well as the legislation established for foreign
investors.
For example,
know that residential real estate investment in the United States provides an
average annual net profitability of up to 10% of the sums invested, and you can
count on a great potential for capital gain on resale. This can be explained by
the stability of real estate prices in the United States, a country still
reeling from a recent real estate crisis and whose inhabitants do not yet have
the means to acquire real estate. Real estate is therefore accessible at low
prices, but you can still expect strong economic growth that will benefit you
when you resell the property in question, because you will have a substantial
capital gain.
INTERNAL RATE OF YIELD
Investing in residential in the US means
selecting homes that give you at least a 50% discount from the last purchase
price. This rate will then be used to calculate an internal rate of return
(IRR) at 20% before tax. In terms of rents, an annual increase of 1.5% is
guaranteed, as well as a resale at double the purchase price after 7 years of
investment.
For example,
if you buy a house and renovate it for a budget of $ 70,000, the total average
annual expenses will be $ 4,965, but you have an average annual net income of $
7,035, which is a return average annual net of 10.1% before personal tax. As
for the tax base, it is reduced every year, when the value of the property is
depreciated.
THE COST OF RENTAL MANAGEMENT
To know the real profitability of a rental
investment in the USA, it is important to include the cost of rental management
in your calculations. You will understand, you will need reliable people to
manage your property, and this task is assigned to the Property Manager whose
remuneration represents on average 10% of gross rents.
This
professional has all the necessary resources to find you reliable tenants, to
collect the rents and to transfer them to your own account. The Property
Manager watches over your property and undertakes the necessary renovations,
pays your local taxes and provides you with a monthly activity report.
TAXATION
In the United States, income from property
benefits from reduced taxation. On condition of creating an LLC-type real
estate company that allows the foreign investor to obtain an annual allowance
with an average value of $ 4,050, while the depreciation of the property is
done in 27 years. However, you must have a substantial sum to pay in cash, because
it is particularly difficult to find a mortgage with American banks, unless you
have the option of mortgaging property with a value equal to that of the loan.
SEEK EXPERT HELP FOR A PROFITABLE REAL ESTATE INVESTMENT IN THE USA
Investing in real estate in the USA can be
done remotely, on condition of calling on experienced experts, established in
the territory. On usa-immo.com, you come into contact with a competent and
experienced French investor who will guide you in choosing the most profitable
types of property, the most important geographical areas in terms of dynamics,
local partners such as lawyers and the most reliable rental management experts.
As you go through the investment process, you will have all the advice you need
to better guide you, while you limit the time necessary because negotiations
have been pre-established to find you a profitable property and attractive
investment conditions.
THE
PROCEDURE TO FOLLOW TO INVEST IN THE USA
As part of this investment in the United
States, you will have to set up an investment structure of the LLC (Limited
Liability Company) type. Entrusted to a lawyer, this task is to make sure that
your investments will be well managed. For tax services, you will need a federal
Individual Tax Identification Number (ITIN) for all procedures with the
Internal Revenue Service. You will also need a dollar account in a US bank to
receive your rent, as well as a rental agency with which you will sign a
contract for the management of your real estate.
As soon as
you have found the house you need in the list previously provided by you, you
become the owner after signing the closing day. Also plan for renovation work
before your rental property is put on the market. As for the search for tenants,
it is ensured by the responsible rental agency, and you can even count on
candidates from "section 8", a federal subsidy program of the type
housing assistance which will avoid you any risk. unpaid.
RENTAL INVESTMENT IN THE USA: WHICH CITIES TO PREFER?
On usa-immo.com, the steps to acquire real
estate in the USA are made easier. This is why the profitability of each city
was previously studied. Among the cities advised by François Braine-Bonnaire,
real estate licensee, founder and director of USA-Immo.com, you have among
others Birmingham, Alabama, a prosperous industrial city favored by young
entrepreneurs constantly looking for apartments. For rent. There's also
Atlanta, Georgia, an ever-expanding city where real estate values are changing,
to the benefit of sophisticated real estate investors.
PRACTICAL ADVICE FOR A PROFITABLE REAL ESTATE INVESTMENT IN THE USA
Compared to France, the United States
represents a real opportunity for foreign investors. This is explained by the
establishment of a tax treaty between the two countries, as well as the
repercussions of the real estate crisis in Uncle Sam's country. But to ensure
the profitability of real estate, he It is important to consider certain
criteria such as the climate, economic dynamism, and the rate of foreclosures.
The United
States is vast and it is only normal to learn about the climates of each city
to better predict natural disasters. It is also important to avoid localities
at high risk of heat waves, floods or tornadoes to preserve the property in
which you have just invested.
You will
then have to focus on the economic dynamism of the city of your choice, because
this ensures the presence of potential tenants, such as students and employees.
Among the areas with high rental demand, you have among others Atlanta in
Georgia, Tampa, Orlando and Miami in Florida, Memphis in Tennessee, New York.
And if we
refer to the home foreclosures linked to subprime mortgages, this led to a 40%
drop in the purchase price of real estate in the US. What is more, the resale
of homes that have been subject to foreclosure is carried out by banks which
offer prices well below the real value in the real estate market.
Either way,
you can count on a stable US economic market, favorable taxes for real estate
investors, and job growth. Whether you want to invest for the short or the long
term, you must therefore choose the type of real estate you are targeting,
making sure you learn about the dynamics of the state of your choice.
