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My friend Bob went skiing the other day and fell in love with a place. He felt like one week was just not enough and now he wants to have a place in Aspen where he can go back whenever he wants. But he is not a US citizen, he doesn't even have a residence permit, just a regular tourist visa. Is it possible for him to buy this cabin? Can foreigners buy real estate in the United States?. I’ll give you the answer, in this video.
Welcome to Not Financial Advice. My name is Tobias, I´m an attorney and international finance expert, and today we'll discuss real estate for foreigners in the US.
So can a non US person buy real estate in the US? Of course. The US market is probably the biggest real estate market in the world, and it attracts investors from pretty much every country on earth.
What Bob has to decide first is why does he want to buy that property. Does he want to able to use it? As a vacation home maybe? Or what he want´s is an investment? Maybe a little bit of both? Maybe he want´s to use it whenever he wants, but be able to rent it when is not using it and maybe offset the cost of maintaining it, and perhaps making a little bit of a profit too.
The good news is that there is no legal impediment for him to do all of that. The bad news, is that often those half use half rent properties are, in general, terrible investments. But this is not our topic today. Today we'll discuss the how. And later on, we’ll discuss if its worth it or not.
For a foreigner to buy real estate in the US, the process is pretty straightforward, a few bureaucratic steps and that's it, you get the title and you own the thing. But wait, because now if you want to sell it, you’ll need to pay a tax called FRIPTA, that applies to foreign owners of real estate. And also if you buy real estate in your own name, then if you get sued conducting business for example, all of your other assets could be in danger.
To avoid this, Bob could buy the property but first incorporate and LLC or a C-Corp. There are some differences between both kinds of entity and you´ll need to consult to a lawyer in your country about which one provide you with the more benefits, or which one you may want to avoid.
Keep in mind that if you do this you’ll have to meet many compliance requirements and filings, so be ready for the extra paperwork.
Now, if what you want is just investing in real estate in the US market, but you don't want to use the property at all and you only want the rental income, then you should consider buying a REIT. A REIT, or Real Estate Investment Trust, is a real estate investment in the form a company. Reits own and rent real estate, but also manage all the properties and you don't have to do absolutely anything but cashing the checks.
Oh, and one more thing, no matter what kind of real estate investment you make. By itself it has nothing to do with your immigration status. You may be able to use if if applying to another special visa, but that's another story. The fact that you are the owner of the cabin, does not give you right to spend more days there than the ones allowed by your visa. Keep that in mind.
So now you know some of the ways. Are you interested in buying? Do you own real estate in the US? Tell me in the comments.
Thanks for watching, and you know the drill.
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And of course, remember that this is not legal advice, and not financial advice either. This channel is only for education and entertainment. Although I am an attorney, my city, county, state, province and country may be different than yours. If you are looking for advice, you should always hire a local licensed professional.
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DISCLAIMER
All the characters featured in this show are fictional. None of this content is legal advice, and none of this content is financial advice either. This channel is only for education and entertainment purposes. If you are looking for advice, you should always hire a local licensed professional in your area.
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