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Globally real estate markets are red-hot, and even a pandemic can’t stop it. For the U.S., mortgage applications for foreigners to purchase U.S. real estate have consistently expanded year-over-year as property prices in most global cities have reached record highs.

What makes the U.S. real estate market so enticing to investors?

Anyone who has invested time and effort in house hunting for investment properties in Hong Kong, Singapore, Paris, London, Sydney, or Vancouver will acknowledge just how inexpensive real estate has become. Markets outside the U.S. have been increasingly hit with various cooling measures, taxes, stamp duty, and mortgage restrictions impacting real estate investors from either entering the market initially or growing their portfolios. What makes the U.S. market unique: there are no restrictions for foreign investment in any real estate asset class. The market also dictates the rise and fall of real estate values, not the government. You can buy a starter property in Texas for $200,000 or a penthouse in Miami for $10,000,000 regardless of your passport.

Below we compare the cost of purchasing real estate in various global and U.S. cities. With up to 75% leverage in all 50 U.S. states, America Mortgages provides an opportunity for anyone to invest in U.S. real estate. You no longer need to battle with banks or pay AUM to become a successful real estate investor.

With U.S. interest rates currently at historic lows, mortgage programs are creative, including qualifying not off your personal income but off the property’s rental income, and it is available for both U.S. citizens and Non-U.S. Citizens. The ability to get up to 75% leverage with a 30-year amortization regardless of the borrower’s age increases rental yields and the affordability of investment properties. This kind of leverage is available ONLY in the U.S. market.

If you are wondering whether U.S. real estate merits putting your money into, the short answer is yes. Let’s look at various global real estate price points versus the U.S.

Price comparison of investment properties:

Let’s take for example Atlanta, Georgia 2000 sqft home:

Purchase Price: $300,200

LTV: 75%

Loan amount: $225,150

Interest rate: 4.75%

Loan Tenure: 30 years

Monthly Loan repayment: $1,174

Rental Income: $2,500

With the rental yield at $2,500, your monthly repayment is $0 with a profit of $1,326 per month; that’s $15,912 per annum. Within 7.5 years, you’d have fully paid off your loan.

Looking at this, we can clearly deduce that the purchase prices and rental yield of a U.S. property prove that it is a great investment, especially when you consider Return on investment (ROI) and the option to finance your property with higher leverage. With purchase prices significantly lower than the rest of the cities globally, your rental income will cover should, at a minimum, cover your mortgage costs. Smart money management and possibly in a few years, will turn into passive income.

According to Billionaire Andrew Carnegie, around 90% of the world’s tycoons have been created by investing in real estate. Real estate offers the most ideal way to build wealth as an investor. Likewise, with all possible types of assets and loan programs available, it is ideal to strike when the iron is hot.

If you are keen to invest in U.S. real estate as a U.S. Expat or foreign national, the first step is to get pre-approved for a mortgage. America Mortgages’ ONLY focus is providing market-rate mortgage financing for U.S. Expats and Foreign Nationals. Our most popular programs are AM No Income Mortgages+ and AM U.S. Expat Mortgage +. However, if for some reason that doesn’t fit your profile or you prefer something more bespoke, our global mortgage team with over 100 years of combined experience is only a phone call away. So investors rejoice and connect with us today at [email protected].

Investors sometimes ask if it makes sense to buy a rental property in another country when they live so far away. They’re often curious about exploring other areas because there are few good deals left where they live, or they’ve heard that specific locations have excellent returns.

During the peak real estate years of 2003–2007, investors from worldwide were calling Realtors in U.S. states like Arizona, Georgia, and Florida, to snap up investment properties—often without even seeing the homes in person. Mainly the purchases were cash. However, if they would have applied for a mortgage, they could have been assured that a bank or private lender will not lend on a property that does not meet certain specifications or values. It is undoubtedly the best way to make sure you’re buying at the right price and in the right condition.

Regardless if you live in Singapore, Hong Kong, Shanghai, or Seoul, investors must be prudent and take certain precautions when purchasing global assets. As one of the only Asia-based U.S.-centric mortgage brokers, America Mortgages can assist you with honest advice and guidance on financing these investments.

Why be a Long-Distance Landlord?

There are pros and cons inherent with long-distance real estate investing. Let’s take a look at the pros first:

1. You have the freedom to invest in more affordable areas. By not restricting yourself to the area you live in, you open up a whole new world of investing possibilities. Many investors in high-cost-of-living countries such as Singapore, Hong Kong, Tokyo, or Seoul can no longer afford to buy investment homes where they live but find the Midwest and Southern U.S. states to be much more affordable. In addition to lower sales prices, these areas also have lower taxes and dwelling (i.e., rental property) insurance premiums.

2. You can fund your future retirement home. Some global real estate investors buy a home in a retirement town to live there or as a second home one day. They may buy a condo near the beach or a ski cabin in the mountains. Then they rent the house out with either short- or long-term leases, and in the process, their tenants pay down the loan principal until the investor is ready to retire or visit. By then, the mortgage might be fully paid off.

3. You may gain new tax deductions. Many parents have children who attend college in the U.S… state. Instead of spending a fortune on a dorm room and semi-annual visits, they buy a modest three-bedroom home near campus. The student lives in this home and rents the other two bedrooms to some friends. The parents save on dorm fees and offset a good part of the total mortgage payment with the other students’ rent (or better yet, their parents). Furthermore, each time that the parents travel to visit the child, 50% of their total trip expenses can be legally written off on their income taxes because they’re also inspecting their property (please consult your U.S. tax advisor).

Handling the Disadvantages of Long-Distance Real Estate Investing

Make no mistake: owning rental property far from home can be a complex undertaking. There are several challenges long-distance landlords often encounter:

– Lack of knowledge about the area in which they’re investing
– Lack of familiarity with good local service providers
– Relying on others to take care of day-to-day problems or repairs
– Difficulties in getting the rent paid on time

But these obstacles don’t have to prevent you from purchasing a long-distance rental property. America Mortgages has Asia-based associates familiar with either the U.S. or Australian market. They can answer questions you may have and often refer you to agents who have worked within these areas.

Here are some ways to make your global real estate investment a success

1. Do your homework and learn about the area. Begin by hiring a good Realtor from the area you’re interested in. You can browse websites such as Realtor.com, Zillow.com, or Trulia.com to get the names of several Realtors in the area who regularly sell investment properties. Interview each Realtor by phone, and ask those you like best to send you listings of homes for sale that meet your criteria. Browse rental properties online to get a feel for the return that you can expect on homes in your price range.

2. Because there are more expenses involved in buying and managing long-distance real estate—such as the travel expenses you’ll incur to visit the property—don’t rule out foreclosures, short sales, and other distressed properties that can be purchased at a substantial discount to comparable homes in the area. This type of home probably won’t be move-in ready, but after you make the necessary improvements, it should yield some start-up or “sweat” equity. It is essential to keep in mind that in order to obtain a good mortgage, the property must be in “liveable” condition. If you find a great deal and it needs work, America Mortgages has several non-citizens, foreign national mortgage programs that can give you the purchase and the renovation financing.

3. Find a reliable and affordable property management agent. It’s not very difficult to make the necessary calls as problems arise, but if you find that landlord duties such as managing repairs and collecting rent is becoming too stressful, ask your Realtor or search online for reliable and affordable property management services. The monthly fee for property management will range from 10%–12% of the rent. Do your homework and research their reviews, fees, and responsibilities.

4. Automate or simplify rent collection. There are a couple of ways to handle collecting rents on time. Some tenants can have their rent automatically deposited into your bank account. You can also have tenants deposit the money into an account at a local bank—you’ll get the rent faster than if they mailed you a check. To encourage timely payment, send them an email or text reminder as the first of the month approaches.

Once you’ve rehabbed the property and your tenants are in place, your rental should run on autopilot for quite a while. If your tenant calls with an occasional repair problem, you can simply pick up the phone and put them in contact with your property manager.

In summary, there are many advantages to buying long-distance real estate. While there are some disadvantages, they can be easily handled if you’ve done your initial research and set up a network of reliable resources. If you are a non-citizen or an expat and thinking about buying U.S. real estate with a mortgage loan, we can help. America Mortgages only focuses on buyers who either do not live in the country they intend to purchase or do not carry the passport. We do this every day, all day.

One of our associates or partners will be happy to answer any questions you may have regarding mortgage financing for your investment.

For more information, drop us a message at [email protected].