Investing in real estate in the United States, or USA real estate investment, has become a reality in recent years, thanks to specific tax arrangements. The United States is a country that continues to attract as much as ever, despite the emergence of new destinations around the world. The country has numerous assets: quality of life, landscapes, culture, mentality, freedom…

In the United States, everything is possible as the country has accustomed us to extremes. Investing in real estate in the United States is an interesting possibility to build wealth and soften your tax rate.

For many French people, the United States is also an ideal ground for investing in real estate. Indeed, the American real estate market is vast and therefore offers many very interesting opportunities.

Nevertheless, to invest in real estate in the United States you must understand the rules and tricks. We have designed this dossier to provide you with the best information and help you in your USA real estate investment approach.

USA Real Estate Investment: The Assets of This Unique Country

The American economy is doing well with growth above 2% for several years and an unemployment rate below 4%, the lowest in 50 years.

The American market also benefits from a low level of risk since the federal system greatly reduces the risk of non-payment. Investing in real estate in the United States is more than ever a golden opportunity.

Real estate in the USA benefits from attractive taxation compared to many European states. Whether it concerns rental income or capital gains, the United States offers very low tax rates.

The United States real estate market is full of good deals and the market is particularly dynamic: prices rising for several years that have not yet reached their initial level from before the 2008 crisis.

For Rental or Your Wealth: Florida, Miami, Cleveland, Detroit Are Waiting for You

Making a USA real estate investment is an excellent opportunity to develop your wealth through purchasing houses or apartments. American law is clear regarding foreign investors wishing to rent or make a cash purchase.

You can therefore expand your wealth and/or receive rent for each property based in the United States. Whether in Florida, Miami, Cleveland, or Detroit, the opportunities are numerous and above all varied. In this sense, creating a company in the United States is worth considering.

Rental real estate is a very profitable investment in the USA, as the demand from tenants is very high. Moreover, the rental yield is attractive. Thus, in the United States, you can expect rental income of up to 11%.

Finally, note that the owner enjoys many rights in the United States; it is simple to evict a tenant who does not pay their rent, for example.

USA Real Estate Investment: Real Estate Prices

Prices have been rising for several years, on the order of more than 4% per year. Across the entire American territory, the price per square meter shows very large disparities depending on location.

However, prices are still very below the value they had before the crisis, and they are also lower than those of other comparable countries. Moreover, since the euro is superior to the dollar in terms of exchange rate, you benefit by investing in USA real estate.

Rental Investment in the United States

USA real estate investment offers one of the best returns among investments and with a low level of risk. The United States offers ideal conditions for rental real estate. The supply of properties is significant, prices are still low but rising, and the number of tenant households is very high.

The high number of tenants results from the 2007/2008 crisis. Indeed, many owners lost their homes during this period and the years that followed. These former owners no longer have the means to acquire real estate and are therefore forced to rent.

How to Acquire Real Estate as a Foreigner?

As a non-resident, you cannot invest in a housing cooperative or in a condominium. However, other options are entirely open and you can buy a house or apartment easily.

You do not need a permanent residence authorization. Only the taxpayer identification number (ITIN) is necessary when you are a non-resident. To obtain it, you can contact the American tax authority (IRS).

Real Estate Taxation in the United States
In the United States, investing in real estate allows you to benefit from numerous tax reductions. Likewise, all expenses related to managing a property can also be deducted. These can include management fees, airfare, maintenance work, hotel expenses, and more.

Be aware that as a non-resident, you are required to declare your real estate income to the U.S. authorities.

There are tax treaties with many countries that prevent double taxation and allow you to achieve good profitability.

As a non-resident, you will need to pay tax on the rental income to the federal state in which the property is located. You will also be responsible for property tax as well as federal income tax. Additionally, depending on the state, Medicare Tax may also apply.

Taxation varies by state and from year to year. Therefore, do not hesitate to consult our expert to be properly informed about your real estate investments in the U.S.

Buying Real Estate in the USA

The process of buying real estate in the United States requires quickly identifying the state in which you wish to invest. As noted above, conditions and taxation can differ significantly from one state to another. Once the state is chosen, you must then select the city.

You should also establish an initial budget and define the type of property you are seeking. Regarding the purchase, you first need to make an offer and establish a sales contract if the offer is accepted.

You will then have 30 to 35 days to make the payment without financial assistance and 40 to 60 days if you use a mortgage. During this period, you will need to sign the Escrow Letter, the Title Company documents, and finally the Closing.

Diversifying Your Investments to Optimize Your Wealth in the USA

To optimize their wealth, investors should consider diversifying their investments, particularly by combining real estate investments with other types of financial assets. This strategy spreads risk and allows investors to take advantage of different yield opportunities offered by U.S. markets.

For example, investing 30,000 euros offers several advantages, such as the ability to choose from various financial instruments like stocks, bonds, or investment funds. Diversification protects capital against fluctuations in the U.S. real estate market while exploring high-growth sectors.

Well-planned diversification also requires constant monitoring of economic and financial trends. Savvy investors regularly evaluate the performance of their portfolio and adjust their strategies based on market developments. During periods of economic volatility, it may be wise to strengthen positions in assets less sensitive to economic cycles, such as commercial real estate in high-demand areas.

By incorporating alternative investments and remaining flexible, investors can maximize potential returns while minimizing the risks associated with over-concentration in a single type of asset.

Investing in the United States: Where to Buy Real Estate?

The United States is a vast country, meaning real estate prices vary greatly from state to state and city to city.

Currently, it is not recommended to invest in real estate in U.S. cities like Chicago and San Francisco, where prices have risen sharply.

On the other hand, it is preferable to invest in cities where population growth is expected to continue in the medium and long term, where employment is also growing, and real estate prices are increasing. Cities like Atlanta, Georgia, or Port Charlotte, Florida, offer excellent opportunities.

Similarly, the state of Ohio in the northern U.S. is a good place to invest in real estate, particularly in a city like Cleveland.

Here is a brief ranking of cities offering the best conditions for investing in real estate in the United States:

• Birmingham, Alabama: Low property tax, many foreclosed properties, very attractive profitability.
• Detroit, Michigan: Low land prices, high rental demand, attractive profitability, low taxation.
• Phoenix, Arizona: Very affordable prices, high profitability, strong economic dynamism.
• Memphis, Tennessee: Affordable prices, very strong demand for rental real estate investment.
• Nashville, Tennessee: Low prices, high profitability, abundant real estate supply.

Choose a city with promising employment opportunities and the presence of large companies. The presence of a recognized university is also an asset. More broadly, target attractive cities that draw investors and have a sustainable economy in the medium and long term, such as Miami, Detroit (currently undergoing reconstruction), or Cleveland.

Conversely, avoid areas where the population is declining and where businesses, services, and infrastructure are underdeveloped.

Working with an American Real Estate Expert

As a non-resident, it is not easy to understand the American real estate market and all its nuances.

It is therefore recommended to seek the expertise of a company specializing in this type of U.S. real estate investment. A simple internet search should help you find professionals ready to assist you with your future real estate investment in the United States.

Creating an International Company to Buy and Manage Your Real Estate in the United States

By creating an international company, you can optimize the taxation of your real estate investments in the U.S. The goal is to hold and manage the property or properties under this company.

ICD Fiduciaries assists you in the process of creating an LLC (Limited Liability Company) in the United States.

Delaware is an ideal location to create your international company because you will benefit from corporate tax exemptions and favorable conditions for investing later in the U.S. real estate market.