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[Article partenaire] With a particularly dynamic economy, the United States is one of the destinations of choice for the diversification of your real estate assets. Uncle Sam’s country attracts the largest volume of foreign investment on the planet. As proof, more than 450 billion dollars of international capital were invested in the USA in 2016. This data undoubtedly constitutes an irrefutable pledge of confidence for French people wishing invest in rental real estate in the United States. However, there are many other reasons to favor a real estate investment in the USA. Find out how a financial investment in real estate in the United States is more beneficial than in France.
Why choose a rental property investment in the USA?
There are many reasons for investing in rental property in the United States.
1 / Strong economic growth
The United States has been the world’s leading economic power for decades. In 2019, the US GDP, estimated at $ 21.482 billion, is up 4% compared to the performance of 2018. These figures place them far ahead of countries such as China and Japan with respective GDPs of $ 14.217 billion. and $ 5.176 billion. Hovering around 1.75% against 1.25% in Europe, the growth rate bodes well for more interesting prospects for a rental investment in the USA.
2 / A low unemployment rate
This is one of the major reasons for investing in rental real estate in the United States. The employment indicators are excellent and the outlook for the coming years is optimistic. At the federal level, the American unemployment rate does not exceed 4%, while it is around 7.1% in France. Therefore, investors who realize a financial investment in the United States in rental real estate will have very little chance of having unpaid rents.
3 / Accessibility to the price of real estate in the United States
On an equivalent surface with France, real estate prices in the United States are more accessible. Estimated on average at € 2,245 in urban areas, the cost of buying a house in the USA is much lower than that of the French market. According to the portal Quelle-coute.net, investing in the USA in real estate is 48% cheaper than in a country like France.
4 / Constantly rising rental prices
For about ten years, they have been rising steadily to an average of $ 1,469 per month in 2019. The good health of the US real estate sector is also explained by the low vacancy rate overall. of the 51 states. This being 4.8%, the housing occupancy rate remains very high in the USA. With these positive indicators, the conditions are ripe for investors to benefit from double-digit profitability. It should be noted that the rent / price ratio for the purchase of real estate in the United States is much more attractive than in France.
5 / A diversified real estate market
When you decide invest in rental real estate in the United States, you can go to condominiums or apartments. It is also possible to bet on a building (multi family home), a detached house (single family home) or the purchase of a terraced house in the USA. Each of these properties has its advantages and limitations. It is therefore up to you to analyze them carefully in order to make the best financial investment in real estate.
6 / An attractive tax system for real estate in the United States
The tax rules applicable to capital gains and property income are more attractive in the United States than in France. Your real estate rental investment in the USA can be amortized over a period of 27.5 years. As for the tax on capital gains from such a financial investment in the United States, it is 20%. However, the tax rate in this case is 34.5% in France. In addition, French investors who choose to invest in real estate in the United States escape double taxation. They benefit from the tax credit system provided for by the Franco-American tax treaty.
7 / Real estate market liquidity
Like any financial investment in the United States, real estate transactions are characterized by their speed. The duration of this operation is 15 days for a cash payment and 45 days for the purchase of a house in the USA by loan. In the US real estate markets, a sale of house and apartment ends in a period of between 60 and 90 days.
8 / Protective legislation for owners
With a rental property investment in the USA, the risk of unpaid rents is minimal. Tenants are handpicked after checking their background, sometimes up to 10 years ago. In addition, they do not benefit from the same legal protection as in France. On the contrary, American law is on the side of the owners.
9 / Low purchase costs
The costs of buying a house in the United States are more affordable than those of such an operation on French territory. If you are going to invest in rental real estate in the United States, you will only pay 10% of it. The 90% of the costs being borne by the seller.
Where to invest in real estate in the United States?
To succeed in your rental property investment project in the USA, you must pay particular attention to the choice of the place of its realization. So if you are looking for where to invest in the United States in real estate and obtain a better profitability, it is necessary to prospect in the side of certain very specific cities like the city of Cleveland in Ohio.
We invite you to read the article on reasons to invest in Cleveland, of which here is a summary of the key points that make Cleveland an attractive destination to invest in real estate in the USA:
– A city with a high-end and young population
Over 63% of people in Cleveland are between the ages of 18 and 34. In addition, this segment of the population is qualified and constitutes a base of solvent tenants.
– Lower taxes
Across the United States, this Ohio city ranks 28th among the least expensive destinations in terms of property taxes. This makes it possible to obtain 2-digit profitability.
– A destination with a pleasant and secure environment
Thanks to a successful gentrification policy with an investment of $ 19 billion made in recent years, Cleveland offers its residents a more secure environment. This newfound tranquility does not fail to attract both individuals and businesses (11 Fortune500 companies are in Cleveland).
– High profitability
A city with a particularly vibrant cultural life, Cleveland has very attractive real estate prices. For a home purchase in the United States in this city of the Northeast, it is necessary to count an entry price of between 55,000 and 65,000 dollars. People who opt for a rental investment in Cleveland can benefit from a return in excess of 13%.
Rental property investment in the USA: the need to know the procedure
The success of your rental property investment project in the USA requires careful preparation. To do this, you must master the whole process of financial investing in real estate in the United States. This procedure has several equally important phases.
– The definition of your investment project real estate rental in the USA
This step is crucial. It consists of defining with precision the type of property in which you plan to invest in the USA: seasonal rental property, or classic. Next, you need to budget for your financial investment. Finally, the deadlines as well as the geographical areas in which you plan your home purchase in the USA must be defined.
– The selection ofreal estate agency
The assistance of a real estate agency is strongly recommended for the realization of your real estate investment project in the USA. To make your job as easy as possible, contact INVEST US, a real estate agency specializing in supporting French speakers for their real estate investments in the United States.
– The deposit payment on behalf of the title company
This occurs after acceptance of the offer by both the seller and the buyer. This involves making a deposit of an amount between 1,000 and 10,000 dollars on the account of the title company. This is the equivalent of a notary in France. During this phase, an inspection of the property that interests you can be carried out by a professional. Although this operation incurs costs ranging from $ 500 to $ 1,000, it is necessary to detect any defects in the property in which you wish to invest.
– The signing of deeds of sale
It is the final phase of a real estate rental investment project in the USA. Once this signature of the deeds of sale, or closing, carried out, the seller can leave with his check and the buyer with his keys. For investors who are unable to travel to the United States, it is possible to accomplish this formality by signing electronically from France.
The criteria for choosing a real estate rental investment in the USA
The choice of a real estate investment in the United States is not made at random. To put the odds on your side and succeed in such a project, you have to take several parameters into consideration. Thus, we can cite among the factors not to be neglected:
1 / The quality of schools located near the property purchased
The quality of schools in the area chosen for your real estate investment in the United States has an impact on rental profitability. We must therefore invest in the USA neara level A establishment.
2 / Demographic growth
This growth has been appreciated over the last few years.
3 / The unemployment rate in the city
This unemployment rate must be as low as possible knowing that the national average is currently around 4%.
4 / Average household income
This is a reliable indicator on the possibility of benefiting from a pool of potential solvent tenants.
Ultimately, we can retain than investing in rental property in the USA and more particularly to Cleveland is an advantageous option for various reasons. These are not only linked to the good health of the American economy, but also to the attractiveness of its real estate market. On many points, a rental property investment in the USA is more profitable than in France. We advise you to use a professional such as INVEST US to support you throughout your project.
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Note: “partner articles” are not French Morning editorial articles. They are provided by or written to order from an advertiser who determines their content.
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