Foreigners buying property in the U.S.A. is becoming more and more common. If you are a foreigner yourself and you want to own property, we have some rules and tips for you that will make buying property in the U.S.A. much easier.
1. Buy property in smaller towns
The first rule and perhaps the most important one is to stay away from big cities for many reasons. The first one would be because it is much cheaper and the second one is that it is much easier to do so. Instead, shoot for smaller towns. Let’s say you want to own property in Oregon. Don’t immediately search for property in Portland. Portland is the biggest city in Oregon. Instead, try finding a property in Umatilla and Morrow County region of Eastern Oregon. These two counties are about 200 miles from Portland and a little farther from Hillsboro which means it will take you only a few hours driving. Not to forget that some of the top family cities in Oregon are located in these two counties.
Where to search for properties?
There are many beautiful towns in Umatilla and Morrow Counties. One of them is Pendleton. A small, agricultural town but a well-connected one. Many people commute into bigger cities to work every day. Even outside Oregon. Mostly to Tri-Cities which includes Kennewick, Pasco, Richland in Washington. Washington is only a little over an hour away across the state line so going to work there from Pendleton is very easy. Walla Walla, WA and La Grande in Union County are also two places where people travel to and from work. The Milton-Freewater area and Walla Walla Valley have a large and growing winery community, so if you ever thought about making your own wine, this is the perfect chance.
The Tri-cities are among the fastest-growing areas in the nation recently so even if you don’t work in agriculture you could easily find a job that you like if you live in Pendleton. Not to forget that there are increasing tech and tourism factors in both Umatilla and Morrow County. Even starting your own business in Oregon is a great idea.
For foreigners buying property in the U.S.A., specifically in Oregon, Portland is their first option because it is wanna-be California and it has a Metro Area. And Eastern Oregon is more like Arizona or New Mexico, or even Texas, which doesn’t sound appealing to many people coming from different parts of the world. But as you can see, you could easily travel just a few hours and be in Portland if that’s what you like.
2. Seek condos or individual homes
Our second rule for foreigners buying property in the U.S.A. is to seek condos or individual homes. Why? Because a foreign owner might decide to leave the property at some point and rent it out. And if you own a co-op this would be impossible. Co-ops are intended to be primary residences and corporations are the ones who own them. So if a foreigner decides to leave the property or rent it out, it will increase the transience in the building. And it is something they don’t want happening. So if you are looking to purchase a home, condos and individual homes are the best two options for you. Even if you plan on moving from Hong Kong finding individual homes in smaller towns and counties is very easy.
Get a property manager
If you own property in the USA, you have a lot of options. You can rent it out to a family, to a business, you can start your own business. There are a lot of things that you can do with it. The important thing is that you shouldn’t leave your property empty. You can turn it into an income property. What is an income property? This is a property bought to earn income through renting, leasing, or price appreciation. It can be residential or commercial. This means that you could earn money without doing anything. And to get the most out of your property, hire a property manager. A property manager can do many things, from finding tenants to collecting rent. A property manager is especially needed if you don’t live in the USA and you own property. You can ask your agent about a good property manager in town.
What does a property manager do?
Like we already said, a property manager can do many things. The first thing he or she can help you with is finding tenants. Because finding tenants isn’t as easy as it sounds. Plus there are a lot of things you have to do before you give the keys of your property to some strangers. A screening process is a must and if you don’t live in the USA it is simply impossible to do it without a property manager. An experienced property manager will know which tenants are suitable for your property. He or she can also collect rent and deal with complaints, move ins and move outs. As you can see, having someone deal with this instead of you can help you out a lot. But it will cost you money too.
3. Work with a real estate agent
Even though assistance for your move overseas can be cheap, hiring a real estate agent to help you might not be. But we highly suggest you do just that. A real estate agent will help you find the home of your dreams as fast as possible. Not just that but a real estate agent knows everything you need from paperwork and documents to own a home in the US as a foreigner. Hiring a real estate agent is the best move you can make to make this complicated process just a bit less complicated.
You can, however, do it without an agent if you can’t afford one. Most real estate agents are paid by the seller through the listing contract if it is listed with an agent. So even if there is an agent involved with the seller of the home, you won’t have to pay anything for that. If you are working with a FSBO you might need to pay an agents’ commission. What is a FSBO? It’s short for For Sale By Owner. This means the owner of the house is selling it without an agent. In this case, it’s actually recommended that you have an agent. Agents know all laws and regulations and buying a house is serious business.
4. Prepare a lot of money
Our final rule for foreigners buying property in the U.S.A. is that you will need to prepare a lot of money. You will have more expenses than just buying a home and hiring a real estate agent. And if you want that property to be income property you might have to pay for a property manager. There are also certain taxes that you will have to pay monthly. But don’t forget that you also must submit a tax return at the end of every tax year. There is a lot of work when you own a property in the US. And if you fail to file tax returns the IRS will automatically charge you 30% of the gross rental income. Which is an expense you want to avoid at all costs. Especially if your property is income property.
Conclusion
These were our 4 rules and tips for foreigners buying property in the U.S.A. Remember them when you officially start planning to make a purchase. They will come in handy. It isn’t easy to buy a property but it is much harder to buy property abroad. There will be a lot of paperwork involved and you will have to spare a lot of money for it but at the end of the day, it will be worth it. Especially if we are talking about income property. An income property can help you pay off your loans and even earn you more money. But it has to be done right and you have to live in the USA or simply hire a property manager that will help you with all of the responsibilities around your income property.
(Submitted by Lisa Roberts.)
