The USA is one of the world’s largest and most thriving economies with very low rates of interest. Low interest rates make the USA an investor’s market, particularly when financing is involved. Inflation continues to be really low in the USA, another major positive for global investors. Inflation is low on account of several financial measures and is successfully capped at 2% or a little above. Employment is also rapidly rising in the USA and the effects of the recession are deemed to be over. By the year 2022, it is estimated that a whopping 15 million jobs will be added in the USA and this will directly influence real estate demand.
Even as the impact of Brexit continues to infuse volatility into several global markets, global investors seek the economic stability and security of the United States real estate market across both residential and commercial segments. There are strong inflows of FDI into the USA commercial realty market and demand should increase for acquiring student and senior housing properties, commercial buildings and even self contained housing units as per experts. Interest rates should remain low in the near future and this will continue to spur real estate growth along with lower inflation. The strengthening of the US dollar and decline of the British pound along with uncertainty in the European market means that the Federal Reserve is unlikely to move interest rates upwards. Investors are settling for properties in cities like New York City, Los Angeles, Boston and San Francisco among others. This continued interest will steadily increase prices and generate good returns for investors.
The US economy will always remain at the top of the heap in spite of global uncertainties since doing business here always gives other countries greater benefits. The USA continues to be a huge importer of products and spends close to $250 billion towards this end annually as per estimates. The USA controls the reserve currency of the world which enables the country to enjoy lower interest rates while borrowing and the same status is extended to citizens as well. The power of the US dollar ensures that the USA economy is alive and kicking even in the toughest of global situations.
The USA continues to be a major hub for global investors on account of its stringent regulations with clear laws. The USA offers superior returns from real estate investments. Most of the political and economic risks present in other countries are absent in the USA. The country offers one of the safest investment prospects in real estate. Foreign investors pumped in more than $80 billion into the USA in 2015 for example. There are clear regulations governing the sale and purchase of property and ample investor protection is assured as a result.
There are tax exemptions that make it easier for REITs (Real Estate Investment Trusts) and foreign stock funds to purchase real estate in America. Institutional investors also have it easy in this case. The USA is a tax friendly investment prospect and safer than most other countries. There is a stable Government and a clear rule of law while there are stringent rules which will also ensure curbs on money laundering through property transactions. Los Angeles and San Francisco are already red hot in terms of property investments. Chinese buyers are continuing to invest in California and they have pumped in close to $6 billion in Los Angeles alone.
The USA is unlike some other countries where land sales are only allowed to those with citizenship. The USA allows real estate sales to foreign investors just like regular citizens. The only guidelines in place are those imposed by the community associations managing properties in particular buildings or neighborhoods. Most of these associations are compulsory but the rules on offer are pretty general and par for the course. Foreign ownership is easier in the USA and very transparent in comparison to other countries.
Investors are also allowed to provide a Power of Attorney to agents in the USA to make all arrangements and sign necessary documents. Foreign investors who pay 40-50% of the property value as the down payment are also exempted from income tax on rentals for the first 10-15 years. An Individual Taxpayer Identification Number (ITIN) is the only thing required for buying property in the United States. This can be issued by a certified professional accountant who is IRS approved or by the Internal Revenue Service. A W-7 form has to be filled for requesting the ITIN. Investors may require only a few other documents including their visas, foreign passports and photo IDs. This is all it takes to buy a home in the United States. Foreign buyers can purchase condominiums, duplexes, triplexes, single family homes, townhomes and quadra-plexes.
The USA is known for being one of the biggest financial and startup hubs in the world. Los Angeles, for example, is home to leading medicine, technology, sports, finance, fashion, entertainment and educational brands. Los Angeles is ranked number three in terms of being a startup hub after San Francisco and New York. Los Angeles offers several advantages including lower costs of operations, a relaxed culture, good universities to scout talent from and proximity to San Francisco as well. New York is considered one of the major financial capitals of the world with its NASDAQ, New York Stock Exchange and Wall Street. New York has more than 200 leading educational institutions along with an entire Financial District. New York also has Tech Valley and Silicon Alley which are major hubs for some of the world’s best known startups. According to the Global Financial Centres Index, New York has already overtaken London as the financial capital of the world.
Chicago is also home to several leading finance, commerce, technology and telecommunications companies while innumerable leading startups like Pinterest, Twitter, Mozilla, Airbnb, Square Inc, Lyft, Levi Strauss & Co, Reddit, Uber, Yelp, Craigslist and the Wikimedia Foundation continue to be headquartered in San Francisco which is also a major banking hub. Chicago is a leader when it comes to energy, biotechnology, automobile manufacturing, financial technologies, medical technologies, health services and food production among other major global industries.