Many foreigners like the idea of purchasing property to rent out in the United States. The idea revolves around the notion of United States being a transparent market, along with a full suite of real estate services and rental agents that manage finances. All of these aspects make the US real estate market very appealing to many foreign investors. However, there are a few factors that foreign investors must consider before they invest in US real estate 2022.
High Litigation Risk
Litigation risks are real when investing in the United States. People in this part of the country will not think twice before filing a case against you. This is why you need to make sure that you have plenty of insurance, and an asset protection strategy. Many people in the US use LLCs to hold their properties, and some even put each individual property in its own LLC or Limited Liability Company. Generally, you would want to put an LLC in the state where you are investing in. This means that if you are investing in different states, it can make things complicated for you. Overall, you need to make sure that you are insured and protected so that you do not have to deal any litigation problem. Getting an attorney to structure things properly for you is often a helpful measure.
You Do need to file a Tax Return
There are myths in the market which tells foreign investors that they need to file a tax return. There are different forms for non-resident investors and thus, there may be a different tax treatment. However, this does not mean that foreign investors will be exempted from tax returns. Therefore, you need to make sure that you do not get in trouble with the IRS. In some countries, filing a tax return is optional and not very stringent. But in the US, the IRS is more dialed in when it comes to taxes. Therefore, people in the US are more apprehensive towards the IRS unlike other countries. Foreign investors need to make sure that they are filing the tax return, and have a good tax preparer who is an expert at what you do.
Hurdles for Foreign Investor
As a foreign investor, there are a few hurdles and hoops that you will need to face as an investor that a US-based investor may not have to deal with when buying a property. This is why it is incredibly important for foreign investors to work with a team. Reaching out to a team will help you find properties and jump through all obstacles that can come with getting an LLC (Limited Liability Company).
Final Thoughts
Overall, foreign investors not only have to side with a business entity, but they also need to work with a great tax team as well. Moreover, they need to be aware of all the litigation nuances that come with setting up a real estate portfolio in the United States. By taking all the above mentioned steps into consideration, foreign investors can build a successful career in US real estate.
from WordPress https://ift.tt/OHZznP4
via IFTTT
