Thinking about passive income, people first of all are looking for a project that is not only profitable, but also reliable. Therefore, many are increasingly turning their interest towards the United States. The political and economic stability of the country attracts more and more investors. We talked with the owner of Russian America, an expert in real estate investment in America, Yuri Mosh, about which areas are most attractive for Ukrainian investors.
Since not everyone can live and manage any business directly in America, potential investors need a guarantee that the project in which they invest money will remain under their reliable control. Such a guarantee “at a distance” can give, for example, real estate. No one will steal real estate, will not take it away, and it cannot be lost, because laws in the USA are respected, and any fraud with real estate is calculated and suppressed very quickly. That is why real estate investments are more stable than, for example, investments in opening a restaurant. Suppose “tomorrow” that the restaurant manager hired by you made a mistake or simply started working poorly. A month or two, and your business will sink. Or stocks that can collapse at once, as you can see from the example of the company. Besides, In the game on the stock exchange, you need to understand what is not so simple. And in order to invest in real estate, you do not need to undergo any special training and receive certificates. Although, of course, in this case it is not recommended to engage in investing without professional consultants. Real estate can be sold at any time, if the investor wants to return their money. The price for it grows by 1-2% per year, thereby protecting your investment from inflation. There are some states where it grows even more dynamically. According to analysts, the return on investment (ROI – Return of Investments) for Miami is from 3% to 5% per year. Rental income in popular areas of Coral Gables and Key Biscayne ranges from 4.8% to 6% per year, and in less respectable,
US law offers many options for generating income from real estate. But at the same time, we must understand that not every real estate can guarantee a profit from investments. Therefore, it is always necessary to study the market for a profitable investment.
“ Our company has spent many years studying the real estate market in order to find the niche that we have now occupied. We were engaged in subletting in New York and buying up apartments in Miami, and only now we came to understand that the most advantageous to date is the construction of houses in small towns in Florida. In towns located close to the ocean, ”Yuri Mosha shares his knowledge.
One of the main reasons for attracting investors to the city is the taxation system: there is no personal income tax in Florida, as well as a luxury tax. Yes, you have to spend time choosing an object, but the profit from such an investment can be from 6% to 10% of annual income. And another very important point that the expert draws attention to is that in order to manage such a business there is no need for active personal participation. The investor does not even need a visa, to fly to America for processing all documents is also not necessary. Sometimes you do not even need the full amount to purchase the property you like: it is enough for an investor to have 30-40% of the required amount for the first installment – that depends on the conditions of the bank. The rest of the money the American bank will issue a loan, i.e. the investor gets a mortgage for 30 years at 3-5% per annum. Citizenship and nationality of the investor in this case do not matter. In America, there is no ban on the purchase of real estate by a foreigner in any state. Moreover, to buy real estate in America, the investor does not need to have income in the United States.
How do investment conditions vary in different states?
Investment conditions may vary greatly in different states.
“ Our company specifically made calculations of the payback period of real estate objects, comparing not only the cities of America, but also of Europe. And the state of Florida is more profitable in this regard. First of all, because there is a small investment threshold. For example, New York is very much overvalued, so the payback period there is longer than in Florida. A house in New York will cost $ 700 thousand, and in Florida the same exact house will cost $ 200 thousand. Hence the long payback in New York, even despite the higher rent , ”explains the investment nuances of Yuri Mosha.
How much money is needed to become an investor
The minimum threshold for entering the investment business with real estate, if it is a house, is about $ 50 thousand. But if, for example, five friends came together and decided that they did not want to take a loan, but at the same time intend to invest money, then they can drop $ 10 thousand. and open a legal entity in America, and the legal entity will own this house. This type of investment is called crowdfunding. In the future, this house can take or immediately sell. But, as a rule, people rent a house for the first year, and sell for the second year in order not to pay tax.
How to build relationships with tax authorities among investors
Despite a bunch of pugalok, which are distributed in films and media about the power and impossibility of tax burden in America, taxes here are not so great as to be afraid of them. In the US, building a relationship with the tax inspectorate is not a problem at all. First, everything is done remotely – a declaration is submitted through the site. Secondly, you can hire a Russian-speaking accountant, whose services cost $ 300 per year.
If we talk about the size of payments, then, for example, when renting property, you have to pay tax on profits of about 20%. Of course, there are schemes to optimize these taxes. For example, to issue a legal entity or, for example, if you built a house and decided to sell it, you must sell it not in the first year after construction, but in the second, because the tax will be either minimal, or – if the profit is up to $ 44 thousand – it is not will be at all.
How much should you invest in the economy of America to get a residence permit or visa
Yuri Mosha notes that real estate investments and the legalization of their stay in the United States exist in parallel planes and are not dependent on each other, as, indeed, in many other countries. Except for cases when the real estate is commercial, and the investor can prove to the immigration service that his real estate is a business that brings income to the state. For example, if he bought a hotel or a restaurant and runs it himself.
How to protect yourself from the charges of investing “dirty money”
Any bank can easily check where your money comes from. But, as a rule, this is done when the amount is very large. Confirm that the money is legitimate, can the fact of selling real estate in your country, inheritance, dividends on shares, a large salary.
How investments are protected from fraud within the country
Cases of fraud in real estate and investment in the United States are extremely rare. Again, these are rather stories from Hollywood films. Too strictly local legislation to those who wish to quickly cash in on gullible investors. The American authorities are too protective of the investment climate and the level of trust of those who are willing to invest. In addition, there are open bases on which the investor himself can check the property and compare its real characteristics with the desired ones.
“ Our company itself checks the technical characteristics of the site for its customers: so that all communications are carried out, so that there are no holes in the site. Moreover, we are conducting legal due diligence and giving our clients access to the state’s state-owned real estate base so that they themselves are sure that they don’t have debts on the plot, that the plot has the correct borders, and so on , ”the expert says.
Yuri Mosha is convinced of the need for expert advice and assistance.
“ There are cases when, through ignorance, they buy such real estate, which then for several years cannot be handed over due to documentary restrictions. Or, for example, there is such a category of real estate that you can rent, but for a period of at least six months, but you cannot take it for rent , ”the expert comments.
Of course, no one investor is ready for such a turn of events, who expects to make a profit now and according to the scheme that is profitable for him. Such nuances can disrupt business plans.
Of course, all these special conditions are spelled out in the transaction, but not all people can get into the essence of legal formulations. If at the same time we take into account that the contract terms written in small print are rarely read even in Russian, it becomes clear that it is better not to risk and sign important documents abroad without qualified professional help. And realtors – they, as they say, are realtors in America: they have to sell, so no one will focus your attention on the nuances. Therefore, it is better to contact consultants who work with trusted realtors who can deduct the transaction agreement themselves for any special conditions and explain everything from beginning to end.
– Could you give a small instruction for those who want to invest in American real estate for the first time?
– Since I have to talk about what I know for sure, I will tell you how our company does it. First, it is necessary to buy a plot for the construction of a house, which our company will help arrange for the investor. Then you can deal with lending. If the investor does not need a loan, we move on to the second point – drawing up a contract with a construction company and choosing a house project. Our company provides its clients with projects of different houses. Thirdly, approval and coordination of the project with the investor, who can make his own changes to the project of the house, and with the construction company. After completing all the necessary documents after 10 months, the client receives the finished house in his name.
I spoke earlier about the possibility of investing in one project by several people – crowdfunding. In the case of this kind of investment, our company helps to arrange real estate on the legal entity. Today it is the most affordable and profitable way to invest. Because anyone with a small amount on hand (an average of $ 10,000 is needed) can buy quality property in a good place in the USA – in our case in Florida.