For Americans, the current U.S. real estate market has been a worrisome issue.
This is due the weakening of the dollar in comparison to many of its foreign counterparts. The economy is in a recession and the unemployment rate has climbed. Many people have succumbed to the poor state of the economy and faced the foreclosure of their homes, increasing the saturation of the market. This has caused real estate values in the United States to become substantially lower.
While it seems like a dire situation for many Americans, foreign investors view the situation in a much more positive light. According to the Association of Foreign investors in Real Estate, the Unites States is still one of the most stable and secure countries for investment. It is number one in the list of countries most viable for foreign U.S. real estate investment. Germany and the UK follow but not closely.
On average, investors who participated in the survey say that 50% or greater of their real estate acquisitions will be in the United States. This is because over the next few years the US economy is expected to rebound. This means that all the homes that foreign investors were able to purchase at low prices will be able to be sold at a premium.
The states have several tax laws that make U.S. real estate investing a great choice for foreign investors.
Most countries charge a capital gains tax on investment homes that are sold. The US does this as well, however there is an amount of time where the money can be held before the tax is due. If the money is rolled over into another investment during this time period, it will become exempt from the tax. This makes it possible for foreign investors to make a series of investments, growing their money each time it is rolled over into the next.
Some hot spots for foreign U.S. real estate investment include: Florida, Arizona, Texas and Nevada – specifically the Las Vegas area. This is mainly because of the large amount of Canadian investors who have chosen to invest in second homes in these areas. For years, Canadians have traditionally purchased Real Estate in these areas, however with the Loonie strong against American dollars Canadians are taking advantage.
Canadians who aren’t interested in turning a profit are beginning to take part in U.S. real estate investing as well.
It has become easier for them to purchase second homes. These are often used as vacation homes and visited during the winter months. This is the reason the warmer states are seeing the large influx of Canadian investors. When the homes are not in use, they can be rented out to offset the taxes and expense of owing a second home.
The general opinion of investment in U.S. real estate has changed amongst foreign investors. The prevailing opinion that it is quite difficult has given away to a softer opinion of somewhat easy. The good thing is that this investing is expected to stimulate the US economy with its influx of money.