International real estate investors spend billions of dollars in the U.S. annually.
If you plan to buy or sell property without stepping foot inside the United States, you must be especially proactive in protecting your interests at every stage.
Conduct due diligence
When buying real estate, it is essential to obtain a detailed report telling you everything you need to know about the property before you invest your money. As part of your fact-finding process, you must:
- Conduct a physical inspection of the property
- Find the title and secure title insurance
- Review all documents related to the property to ensure there are no claims or liens
- Conduct a financial review to determine your return on investment and cash flow opportunities
Consider tax implications
The Foreign Investment Real Property Tax Act (FIRPTA) imposes a mandatory tax on nonresidents and foreign corporations who engage in business within the U.S. The withholding rates vary based on the ownership and the nature of the investment.
Examine contracts carefully
Your real estate contract should outline your expectations for the acquisition of property as well as the expectations of the seller. It is a legally binding document that covers matters such as costs and considerations, financing, inspection reports, closing date, etc. Language is precise and important, so when finalizing a purchase from a seller in the U.S., you should make sure you understand the contract in detail.
Your international real estate venture is a huge investment in your future. Understanding the process can help you protect your rights in U.S. and international courts.