Real Estate Investments in the USA. The real estate sector is very attractive in terms of investments. While the sector is tending towards saturation in France, there are many opportunities in other countries, especially in the USA. Details from our guide to financial investing on US real estate investments.
Reasons to Invest in USA Real Estate
During 2007, the crisis in the real estate sector hit the United States. A crisis whose repercussions are being strongly felt around the world, especially in France. Affected by this real estate crisis in 2008, France is facing a sharp drop in investments in the sector. This is why many investors choose to focus on the United States. After a few years, the increase in the price of real estate investment did not prevent the French from investing in this country. This is explained by the fact that currently, the value of the real estate in the United States is at 70% of its peak in 2007. Thus, a house currently estimated at 98,000 dollars was sold for 130,000 dollars in 2007.
This attraction of real estate investors is also due to the current European economic situation. In fact, in the United States, in addition to simple and fast purchasing procedures, the real estate market is once again in constant progression. Added to this are low closing costs.
In the real estate sector, US investments are enjoying strong profitability. In fact, during 2014, the US rental market experienced an average return of 9.06% in the third quarter. In addition to the very profitable return on investment, rental properties have a high occupancy rate. For example, Wayne County has an average occupancy rate of 91.1%, ranking it 7th among the counties with high occupancy.
As previously indicated, the price of the real estate market is increasing significantly. That said, the price has yet to peak. The opportunities are therefore excellent and make it possible to envisage the possibility of considerable added value. In addition, a tax treaty binds France and the United States. This allows French investors to benefit from favorable taxation. Modified in 2009, this convention gives investors the possibility of avoiding double taxation on rental income. Moreover, American income declared in France is released from the CSG and CRDS.
Risks associated with USA real estate investments
For a potential investor, the first risk to take into account is that of country risk and dollar risk. While the United States is a country of great democratic stability, the fact remains that investments can suffer the harmful consequences of budgetary imbalance.
Then there is the risk inherent in any real estate and rental market. Historically, prices in the real estate sector have been attractive. Moreover, the rent or buy ratios prove it. However, if the price increase is established at a slower pace, it is not certain that it will continue in the years to come. Especially since the unemployment rate is increasingly threatening in some cities.
After that, there are legal risks. It is well known that the United States is a country where court proceedings, trials, and lawyers reign supreme. Therefore, it is essential to take out civil liability insurance. Besides, it is also preferable to create a company there, to preserve the patrimony against possible damages.
Finally, there are natural hazards, especially in Florida and Alabama. Indeed, these two states are often hit by bad weather, cyclones, or other hurricanes. However, in the United States, it is possible to purchase insurance and be compensated in the event of a natural disaster.
There are many investment possibilities in other countries.