International Investors Guide
Investing in Real Estate in Texas: International Investor Guide
Considering investing in real estate in the United States? There’s no better option than Houston. Wondering what the process is like? Here is your international investor guide. You will want to keep in mind the following when investing in property here:
- You DON’T need to be a U.S. citizen in order to be able to buy a house here. Investing in real property in the country won’t give you any additional privileges in terms of your stay or residency.
- You can purchase property with cash. However the U.S. government will need information about the money and how it was earned. Reporting cash transactions exceeding $10,000 to the federal government is required by law.
- An international investor can purchase just about any kind of property. Most co-ops (housing cooperatives), however, do not allow foreign ownership.
- If you don’t want to use cash, you can opt for financing. You must be deemed qualified with a lender. Most banks will have more stringent requirements for an international investor. They may require a higher down payment of 30-40%, for example, and they will require proof of income and assets.
A knowledgeable Realtor will be able to guide you to the neighborhoods and properties. We can also advise you as to local market trends. Note: real estate agents in the U.S. need to be licensed. In Texas, the agency responsible for licensing is the Texas Real Estate Commission (TREC).
There are many ways to structure your investment in U.S. real estate. Each structure has its advantages and disadvantages depending on your particular goals. It’s important to let your Realtor know what your objectives are. If your Realtor knows what you want to do with the property then they can advise you accordingly. So determine if you want to improve then sell or use the property for rental income.
Tax Implications for an International investor
Discuss with your accountant the possible taxation implications of investing in real estate. The Foreign Investment in Real Property Tax Act requires 10 percent of the proceeds to be withheld when foreigners dispose of real property in the U.S. Exceptions may apply for certain situations.