info on usa property
- Thread starter pricey
- Start date
this may be of interest. I can't vouch for the mob's integrity though.
http://www.propertyworld.com/sub_pa...es - United States/section/sitemap/editID/851
http://www.propertyworld.com/sub_pa...es - United States/section/sitemap/editID/851
Owning an individual apartment and renting it out in the States is hard, because most of the agents are sales only.
There are very few agencies that manage individual properties; they tend to manage whole blocks of apartments.
USA doesn't have restrictions on Australians owning real estate in the USA, so no residency or visa status requirements, etc.
But if owned in your personal name, be aware that you'll have to file both US and Australian income tax returns each year. You'll pay tax twice, but you won't pay "double tax", if you know what I mean. eg US may calculate you owe $2K, you pay $2K there. Then you declare the same income again in Australia, the ATO calculate (on that rental income) that you owe $3K. You get credit for the $2K already paid to the US government, and pay the ATO another $1K, but you don't have to pay $5K in total (as many people seem to believe).
A strata-titled apartment is what they call a condominium. Finding a good PM is exceedingly difficult, as Marc points out.
You wouldn't necessarily need a US bank account; you could get the PM to transfer funds directly to your Aussie bank account. You'd still have to file US tax returns, though.
I've looked into this extensively, and I think investing in the USA is only worthwhile if you're investing on a significant scale, and then you can afford to employ your own staff to manage the complex. I'm looking at putting together a syndicate, eg 5 members, contribute $100K each deposit, buy approx $2M complex of about 100 apartments at 75% LVR. Gross rental income approx $700K pa, operating expenses $350K pa, mortgage interest $120K pa, net positive cashflow $230K pa. ie Each person putting in $100K gets $46K pa positive cashflow, plus equity growth.
But if owned in your personal name, be aware that you'll have to file both US and Australian income tax returns each year. You'll pay tax twice, but you won't pay "double tax", if you know what I mean. eg US may calculate you owe $2K, you pay $2K there. Then you declare the same income again in Australia, the ATO calculate (on that rental income) that you owe $3K. You get credit for the $2K already paid to the US government, and pay the ATO another $1K, but you don't have to pay $5K in total (as many people seem to believe).
A strata-titled apartment is what they call a condominium. Finding a good PM is exceedingly difficult, as Marc points out.
You wouldn't necessarily need a US bank account; you could get the PM to transfer funds directly to your Aussie bank account. You'd still have to file US tax returns, though.
I've looked into this extensively, and I think investing in the USA is only worthwhile if you're investing on a significant scale, and then you can afford to employ your own staff to manage the complex. I'm looking at putting together a syndicate, eg 5 members, contribute $100K each deposit, buy approx $2M complex of about 100 apartments at 75% LVR. Gross rental income approx $700K pa, operating expenses $350K pa, mortgage interest $120K pa, net positive cashflow $230K pa. ie Each person putting in $100K gets $46K pa positive cashflow, plus equity growth.
Oh, yes, and I know other people who've invested in SFR (houses, condos) in the USA, and they're not able to get anywhere near the LTVs that propertyworld are claiming (60% standard, 70% if lucky, whereas propertyworld claim they can get 80% in Texas). So if propertyworld are for real, that's an amazing offer.
You can get higher LTVs for MFR (commercial, multi-family apartment complexes) than for SFR - it's the opposite to in Australia.
You can get higher LTVs for MFR (commercial, multi-family apartment complexes) than for SFR - it's the opposite to in Australia.
I'm looking into this at present as well pricey
If its canada (specifically Ontario), then I was told I can get 75% lvr on a full doc
with the US it varies from bank to bank
I'd suggest you email 3-4 of the local banks and tell them you want to buy a place and see what they come up with.
If you're looking at something where you only have to put down 20% and its a forclosure / short sale its an easy proposal. The catch is you have to have your bank ready to go in the background as a lot of these settle in 14 days... or the ones I've been looking at do.
There was an article out a few days ago from the daily reckoning, which you may find interesting as well
http://www.frbsf.org/publications/economics/letter/2009/el2009-33.html
Honestly I'm still trying to figure out how the US can say they're on their way to a recovery when they owe almost (at time of posting) $12 Trilion. http://www.brillig.com/debt_clock/
If its canada (specifically Ontario), then I was told I can get 75% lvr on a full doc
with the US it varies from bank to bank
I'd suggest you email 3-4 of the local banks and tell them you want to buy a place and see what they come up with.
If you're looking at something where you only have to put down 20% and its a forclosure / short sale its an easy proposal. The catch is you have to have your bank ready to go in the background as a lot of these settle in 14 days... or the ones I've been looking at do.
There was an article out a few days ago from the daily reckoning, which you may find interesting as well
http://www.frbsf.org/publications/economics/letter/2009/el2009-33.html
Honestly I'm still trying to figure out how the US can say they're on their way to a recovery when they owe almost (at time of posting) $12 Trilion. http://www.brillig.com/debt_clock/
Yes. You get an ITIN (Individual Taxpayer Identification Number) instead, which is analogous to the Aussie TFN (tax file number). See, for example, this article. This gives you a mechanism for paying the taxes associated with property ownership, without having to have a SSN.
Non-recourse commercial mortgage at about 5.75-6% fixed for 30 years, 80% LTV (LVR).
okay my hand is up.
Thanks Ozperp,
How do I go about getting one of these numbers now the banks aren't issuing them? Also, if you arent borrowing is it still hard?
EIN Numbers
Hi Pricey,
The way we did it when we purchased our Texas properties was to set up an LLC first. An LLC is a Limited Liability Company and can be owned and operated by Foreign Nationals. Each US State has slightly different rules for setting them up.
We originally got ours for asset protection purposes, but there has also been some other positive spin-offs from it.
When we set up the LLC, we paid the extra for the EIN Full Service that was offered. We also paid the extra for the Registered Agent Service as well which meant we had a US address for all correspondence and documents. They then forward these onto us here in OZ. All up I think it was around $800 USD, but don't quote me on that. As I recall, it was cheaper than here.
This was really handy as it made life much easier when dealing with US banks.
An EIN is an Employer Identification Number and serves the same purpose as an SSN or ITIN. It's one of the first things you are asked for if you're doing business in the US.
By the way, you can set your LLC online. It was actually quite straightforward. I have some info about investing in the US on my own personal website, www.paragon-marketing.org if you are interested.
There is a section there on US LLC's and it links you through to a quote page from the people we got our LLC from. Their prices were very reasonable and they have been very co-operative in responding to all my questions.
Hope this helps you out.
Cheers,
Geoff W
Hi Pricey,
The way we did it when we purchased our Texas properties was to set up an LLC first. An LLC is a Limited Liability Company and can be owned and operated by Foreign Nationals. Each US State has slightly different rules for setting them up.
We originally got ours for asset protection purposes, but there has also been some other positive spin-offs from it.
When we set up the LLC, we paid the extra for the EIN Full Service that was offered. We also paid the extra for the Registered Agent Service as well which meant we had a US address for all correspondence and documents. They then forward these onto us here in OZ. All up I think it was around $800 USD, but don't quote me on that. As I recall, it was cheaper than here.
This was really handy as it made life much easier when dealing with US banks.
An EIN is an Employer Identification Number and serves the same purpose as an SSN or ITIN. It's one of the first things you are asked for if you're doing business in the US.
By the way, you can set your LLC online. It was actually quite straightforward. I have some info about investing in the US on my own personal website, www.paragon-marketing.org if you are interested.
There is a section there on US LLC's and it links you through to a quote page from the people we got our LLC from. Their prices were very reasonable and they have been very co-operative in responding to all my questions.
Hope this helps you out.
Cheers,
Geoff W
Geoff
What were the other benefits?
Why did you pick Texas in particular?
Was pricing the reason?
