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Investing in the US

Investing in the US

Old Jan 24th 2013, 7:26 pm
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Default Investing in the US

Hi everybody!

Just wondering if anyone knows anything about investment properties in the US as a non-citizen.

I'm a UK citizen, PR in Canada, looking into buying some rental real estate in the states. From an immigration standpoint this is perfectly legal, correct? I also understand that I would need to file a US income tax return on rental income and be taxed on that income?

I plan on continuing to live in Canada - however - does the fact that I would be receiving income in the US create any immigration issues for when I visit under the VWP? I would not imagine that it constitutes work, or a violation of the VWP, but I can't seem to find an answer.

How about if eventually I decide to obtain a non-immigrant visa for the USA (I am a musician and may need to get a P2 visa at some point), would my investment situation create any problems?

I certainly do not want to break any laws!

Thanks for any guidance.
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Old Jan 24th 2013, 7:46 pm
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Default Re: Investing in the US

Originally Posted by saucewagon View Post
would my investment situation create any problems?
No. Many foreigners own property in the US.
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Old Jan 24th 2013, 11:08 pm
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Default Re: Investing in the US

It is certainly possible for a non-US citizen to own property in the US.

Whether or not this is likely to be a good investment opportunity is a completely different question - I believe that, for most people, the answer is usually "no" ...
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Old Jan 24th 2013, 11:58 pm
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Default Re: Investing in the US

the majority of my clients are foreign. a good few Canadians and some Europeans.

as for investment potential most are now looking at rents covering costs and just making capital growth. florida is starting to pick up, in some areas prices have rise 10% in the last year
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Old Jan 25th 2013, 12:34 am
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Default Re: Investing in the US

Thanks for the replies! That's good news. I guess what I was most concerned about was the idea of receiving US income while physically present in the US, even if only as a visitor - although I guess this is not an immigration issue and I am just creating one?

Thanks again.
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Old Jan 25th 2013, 2:21 am
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Default Re: Investing in the US

Why would you want to buy a property in the US rather than Canada? Owning a property in another country will involve extra costa in management fees and also your taxes will become significantly more complicated as you'll be exposed to both US and Canadian taxation on any rental income.

I can see if you are Chinese with a few million you want to invest outside China that US real estate could be a good idea, but for most people cross border real estate is just a pain.

Last edited by nun; Jan 25th 2013 at 2:23 am.
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Old Jan 27th 2013, 4:25 pm
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Default Re: Investing in the US

Originally Posted by saucewagon View Post
Hi everybody!
I'm a UK citizen, PR in Canada, looking into buying some rental real estate in the states. From an immigration standpoint this is perfectly legal, correct? I also understand that I would need to file a US income tax return on rental income and be taxed on that income?

I plan on continuing to live in Canada - however - does the fact that I would be receiving income in the US create any immigration issues for when I visit under the VWP? I would not imagine that it constitutes work, or a violation of the VWP, but I can't seem to find an answer.
Can't see a problem. Perfectly legal. You will need to apply for an ITIN from the IRS for taxes. Then fill out a 1040NR (iirc) each year for the IRS.

If you come to dispose of the property you WILL need an ITIN otherwise there is a 10% withholding tax until you file an appropriate 1040NR.

It won't create any immigrations either but strangely, property records are being integrated at US Immigration so don't pretend you don't own property in the US when coming in. (This happened to my parents, the Immigration guy read off the properties they own in Florida!). It has no bearing on VWP.
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Old Jan 27th 2013, 4:30 pm
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Default Re: Investing in the US

Originally Posted by nun View Post
Why would you want to buy a property in the US rather than Canada? Owning a property in another country will involve extra costa in management fees and also your taxes will become significantly more complicated as you'll be exposed to both US and Canadian taxation on any rental income.

I can see if you are Chinese with a few million you want to invest outside China that US real estate could be a good idea, but for most people cross border real estate is just a pain.
Sorry, but you are talking rubbish.

Management fees are no less or more for anyone else who uses a property management company.

Taxes aren't really a big deal either. The only thing you need to work out is depreciation of the property, which is a bit of problem this year as the IRS forms aren't yet available.

The only problem with owning property in another country is somehow becoming disconnected with the whole process, and having a property manager who does not have your best interests at heart. It's very easy to become demotivated when you get bad tenants, a property manager who adds stuff to the bill all the time, and then you have to suddenly find $1k for a new window or something.

To the OP, feel free if you want a bit more advice. We buy rentals, rent them out, and look after foreign investor property here as well. And we're based in Florida of course.
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Old Jan 27th 2013, 4:58 pm
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Default Re: Investing in the US

Originally Posted by tinman0 View Post
Sorry, but you are talking rubbish.

Management fees are no less or more for anyone else who uses a property management company.

Taxes aren't really a big deal either. The only thing you need to work out is depreciation of the property, which is a bit of problem this year as the IRS forms aren't yet available.

The only problem with owning property in another country is somehow becoming disconnected with the whole process, and having a property manager who does not have your best interests at heart. It's very easy to become demotivated when you get bad tenants, a property manager who adds stuff to the bill all the time, and then you have to suddenly find $1k for a new window or something.

To the OP, feel free if you want a bit more advice. We buy rentals, rent them out, and look after foreign investor property here as well. And we're based in Florida of course.
I'll accept that management fees are similar in Canada and the US, but I don't see the reason to buy in the US rather than Canada if you're a Canadian. One of the first rules when beginning to invest in RE is to buy close to where you live so you can keep an eye on the property. You can also manage the property yourself and pocket those management fees.

The tax issues are not that difficult, but why would you even bother with the trouble of having to get a TIN and file a 1040NR. I'm sure there are plenty of good opportunities in Canada.
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Old Jan 27th 2013, 7:06 pm
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Default Re: Investing in the US

Originally Posted by tinman0 View Post
Sorry, but you are talking rubbish.

Management fees are no less or more for anyone else who uses a property management company.

Taxes aren't really a big deal either. The only thing you need to work out is depreciation of the property, which is a bit of problem this year as the IRS forms aren't yet available.

The only problem with owning property in another country is somehow becoming disconnected with the whole process, and having a property manager who does not have your best interests at heart. It's very easy to become demotivated when you get bad tenants, a property manager who adds stuff to the bill all the time, and then you have to suddenly find $1k for a new window or something.

To the OP, feel free if you want a bit more advice. We buy rentals, rent them out, and look after foreign investor property here as well. And we're based in Florida of course.
The management fees may be the same. but estate tax for non-resident investors can be very expensive.

Last edited by bruceba; Jan 27th 2013 at 7:07 pm. Reason: sp
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Old Jan 28th 2013, 3:56 am
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Default Re: Investing in the US

Originally Posted by bruceba View Post
The management fees may be the same. but estate tax for non-resident investors can be very expensive.
Which estate taxes are we talking about? Do you mean property taxes? Estate taxes can be got around by having the property in your name and your wifes name, or with a dated quick claim deed.
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Old Jan 28th 2013, 4:01 am
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Default Re: Investing in the US

Originally Posted by nun View Post
I'll accept that management fees are similar in Canada and the US, but I don't see the reason to buy in the US rather than Canada if you're a Canadian. One of the first rules when beginning to invest in RE is to buy close to where you live so you can keep an eye on the property. You can also manage the property yourself and pocket those management fees.

The tax issues are not that difficult, but why would you even bother with the trouble of having to get a TIN and file a 1040NR. I'm sure there are plenty of good opportunities in Canada.
Find the OP an ROI in Canada of 20-30% then. The OP has obviously heard about some returns investors are making in Florida, and I can assure you - it's true.
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Old Jan 28th 2013, 4:03 am
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Default Re: Investing in the US

Originally Posted by tinman0 View Post
or with a dated quick claim deed.
That would be a quit claim deed.
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Old Jan 28th 2013, 5:29 am
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Default Re: Investing in the US

Originally Posted by tinman0 View Post
Find the OP an ROI in Canada of 20-30% then. The OP has obviously heard about some returns investors are making in Florida, and I can assure you - it's true.


Let me get back to you just as soon as my check for $13M from Nigeria clears ...
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Old Jan 28th 2013, 5:30 am
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Default Re: Investing in the US

Originally Posted by tinman0 View Post
Find the OP an ROI in Canada of 20-30% then. The OP has obviously heard about some returns investors are making in Florida, and I can assure you - it's true.
....I hear bridges in Brooklyn are a good investment too.

Any investor looking to make 30% is a fool, that's speculation, not investing.

If I was the OP I'd buy a rental property in Canada and avoid the currency risk and manage it myself, there's a guaranteed 5-10% ROI over a FL property with zero risk.

Last edited by nun; Jan 28th 2013 at 5:33 am.
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