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The United States has always been a tourist destination very visited by foreigners. In recent years, demand has grown so much that a new desire has emerged: to buy houses in the United States. The search for real estate at first was only for investment purposes and having a holiday home. However, recently another reason has emerged! There is a real escape of foreigners who also intend to live in the USA and live the American dream.
What you need to know before buying
The purchase of an apartment or house in the United States is relatively simple and very similar to the acquisition of a property in other parts of the world. A deed is transferred to the name of the new owner. It is an unbureaucratic and totally legitimate process.
Before we enter the 10 steps to buy your property in the USA, it is essential to understand the following:
Do I need to be physically present in the USA or can I buy from a distance?
You don’t need to move to the U.S. to buy a house or apartment in the United States. In states such as Florida, for example, it is possible to do everything remotely.
In recent years, remote technology and procedures have evolved a lot to accommodate remote work, which has been consolidated and has been adopted by many companies and also by public agencies in the USA.
The U.S. has adopted and continues to work to increasingly optimize bureaucratic procedures so that they can be carried out remotely. In this way, several processes, such as the purchase of a property, can already be carried out entirely at a distance.
When we tell our customers that the whole process can be done at a distance, several doubts arise and it is natural. How to check all the details of the property without seeing it personally and walk through the various environments? How to send the purchase documents? And when it’s time to transfer the deed?
That’s why we have prepared an article explaining in detail how the distance buying process occurs. Click here to access it.
Can Foreigners finance the purchase of the house in the US through American banks?
Yes, foreigners are allowed to finance through American banks and take advantage of the low interest rates of the United States and long payment terms (up to 30 years).
Despite the recent rise in interest rates in the US, the rate is not high! Contrary to what many people think, it has only returned to the levels before the pandemic.
During the pandemic, the U.S. drastically lowered interest rates to stimulate the economy at a difficult time in our history. However, that was not the reality of the American economy. Rates of 6% to 7%, like the ones we see today, are closer to normal.
Therefore, it is not worth waiting for a possible fall in American interest rates to finance your property in the United States.
Even if interest rates fall in the coming months, it is unlikely that the fall will be accentuated to the point of justifying a wait. In fact, waiting to buy can be a disastrous strategy, as we explain in this article.
Are there any immigration benefits when buying real estate in the USA?
The purchase of a property in the USA does not bring any benefit or immigration facility. Many foreigners believe that buying a property in Florida they will get a permanent residence visa (Green Card) or immigration facilities. This information does not apply. Obtaining a residence visa is a complex process that depends on other factors.
You can enjoy your property whenever you are in the USA, with a tourist visa or other visa you have (work, study, etc.). While not in American territory, the property can be rented to third parties (in case it allows seasonal rental) or closed and be administered by a Property Management company, which does the maintenance, cleaning, follow-up of correspondence, etc. Understand in this article the Total Property Management service.
How to buy your home in the USA: 10 steps
STEP 1: Defining the purpose of the purchase
Buying a property in Florida has three main objectives:
- Investment
- Second Home
- Main home
Defining the objective is fundamental, since it will directly influence the choice of the region to buy and also the type of property.
Properties aimed at seasonal rental, for example, have specific legislation. Not all U.S. cities allow or, if allowed, there are specific zoning. In the city of Miami, for example, only a few condominiums allow practice. We will detain more later in this practical guide on this property profile.
A family moving to the United States is looking for housing, that is, residential houses. They are usually looking for quiet neighborhoods, focused on families and close to good schools.
If it is a property aimed at obtaining income with seasonal rental (short-term rental), the ideal is that the property is located near the main attractions of the city (Ex. Orlando parks).
There are also foreigners who seek to have only a second home in Florida, not aiming at any income with rent, which also changes the profile of the region.
Most foreign customers who seek the services of our real estate, aim to buy a property to use on vacation and that, at the same time, can rent in the periods they do not use, obtaining income in dollars. In this way, they unite two objectives into one: 1 – to invest and 2- to have a second home in Florida.
It is for this reason that holiday homes in Orlando, near the parks, are today one of the best global investments. Likewise, apartments in the new condominiums launched in central Miami are also the most sought after.
This type of property, in addition to offering an excellent return in dollars, including possibilities to pay off the portion of the financing and also generate profit, allows the owner to enjoy it on vacation.
In this context, the choice of broker is fundamental to a successful purchase. The broker has the knowledge and experience of the market to guide the buyer where to buy and offer the best options in the region.
In this Practical Guide we put as “Step 2” the choice of the broker (next topic). However, already at this stage of the purchase process (Step 2) the broker can also be very useful helping the buyer in the definition and maturation of his goals.
STEP 2 – The choice of the broker
In Florida, it is always best to work with an experienced real estate professional,
In Florida there is a single platform where all properties available for sale are registered. Each realtor has an access password and that’s it! All reports, value table, statistics, sales history and other property information are available there for anyone who works as a broker.
AMG International Realty has a team of professionals and partners in to offer all the advice from property research to after-sales: accountants, lawyers, concierge service and Title Company. We also offer the service of administration of your property and total management of the rent. Even the renovation and decoration of your new home in Florida we take care of it for you.
STEP 3 – Where to buy houses in the USA? What is the best city or region?
There are two major economic centers that we recommend buying houses in the United States: 1 – Miami and surroundings and 2 – Orlando and surroundings. Both offer several real estate options, whatever your purchase purpose: housing, having a second home in Florida or investment. Depending on the objective, there are neighborhoods and communities that fit better and others not, both in Orlando and Miami.
The decision must also take into account the personal and subjective side of each buyer. Some people prefer the Orlando region, because of the theme parks. Others prefer the glamour and beaches of Miami.
The cities and communities around Miami and Orlando are also worth mentioning. Some of these communities are already well known to foreigners. In Miami, some examples are: Boca Raton, Fort Lauderdale, West Palm Beach, among others.
In this article we will give an overview of the regions of Miami and Orlando, briefly commenting on the main neighborhoods and communities.
Neighborhoods and communities in Orlando
Few know, but when we refer to the regions of Orlando, we are almost always talking about communities or cities located in the so-called Greater Orlando, that is, outside Orlando. Even Disney parks are in another city, called Lake Buena Vista.
An interesting example is the city of Kissimmee, better known by foreigners as a neighborhood of Orlando, when, in reality, it is a neighboring city, belonging to the county of Osceola. Kissimmee is known for its holiday home condominiums in Orlando, where tourists from all over the world rent holiday homes near the parks.
For this reason, the region is one of the most recommended for those looking to invest and obtain income with seasonal rent, since it has a specific zoning for this type of practice and is located near the main theme parks. There are several launches of houses in the region with extremely attractive prices and that give excellent rate and return for the investor.
If the goal is to acquire a residential property, either to live or maintain as a second home (without being available for rent in the vacant periods), the neighborhoods of Dr. Phillips and Hunters Creek in Orlando are interesting options. There are also small towns around Orlando (approximately 30 minutes away by car) with options of very high standard houses in gated communities and with attractive prices, such as the communities of Windermere, Winter Garden, Winter Park and Lake Nona.
The cities around Orlando have been gaining prominence in central Florida, for the quality of life they offer and proximity to the main attractions of Orlando. Some of these cities are even close to the Florida Coast, with its beautiful beaches (one hour’s drive).
Miami and surrounding cities
When commenting on the best neighborhoods in Miami, the trendy regions of Miami Beach and South Beach soon come to mind. Traditionally these are the neighborhoods where “everything happens”, with great restaurants, clubs, beaches and all the best that Miami has to offer. It turns out that, for a few years now, other central neighborhoods, in the surroundings of Downtown, have begun to attract the attention of buyers.
The neighborhood of Brickell, for example, has emerged as one of the main destinations in the preference of investors. In addition to offering attractive prices per square meter, it is more centralized. Several high-end condominiums have been launched in the region. Brickell, which was once seen as an office neighborhood and known as the city’s financial district, now offers shops, restaurants, bars and one of the city’s main shopping malls: The Brickell City Center. It is a great region for those who want to enjoy the glamour and central urban style of Miami.
The Edgewater neighborhood, next to Brickell, is another region that emerges in Miami. While also centrally located, Edgewater preserves a “community” atmosphere, with a more residential environment, compared to Brickell. It is a great neighborhood for those who want to be close to everything Miami has to offer, but not so close to all the hustle and bustle of Downtown and Brickell.
For those looking for even more residential regions, but with total infrastructure and close to the beaches, the region of Aventura, to the north, still remains one of the best options. The region, which is a city belonging to Miami-Dade County, is very beloved by foreigners and is home to one of the largest shopping malls in the USA: The Aventura Mall. In addition, it is close to the beautiful beaches of Sunny Isles Beach. Property prices are also considerably attractive and there are several condominiums of interesting buildings.
If you are looking for more exclusive and reserved communities, the regions of Sunny Isles Beach, Bal Harbour and Bay Harbor Islands are the most recommended. These regions, despite offering higher prices compared to the others mentioned above, still remain more attractive than other exclusive Miami communities such as Key Biscayne and Miami Beach.
Downtown Miami
Downtown has undergone a transformation in recent years receiving several enterprises that have revolutionized the region. They are condominiums that allow the practice of short-season rental.
Miami, unlike Orlando, is a city that offers few real estate options that allow short-term rental. However, in recent years, the city has seen in this real estate segment an opportunity to receive investments and also meet the high demand of tourists and professionals who arrive in the region annually.
Suburbs and surrounding cities
Two cities deserve to be highlighted in the suburb of Miami: Weston and Doral. Both offer excellent quality of life, with great schools and very interesting options of houses within residential condominiums.
Heading north, the city of Fort Lauderdale is also an excellent option for those looking to live, invest or have a second home in Florida. Recently the region has received several condominiums facing the sea or close to the beach with interesting prices per square meter. Fort Lauderdale international airport, which has been receiving several direct flights from Brazil, is also a great differential for the region.
STEP 4: Pre-qualification for financing
This topic applies only to foreigners who choose to finance the property through American banks. Most foreigners who contact us to buy real estate in Florida, opt for the financed purchase.
Before scheduling the visit to the properties, it is important to first confirm if you are pre-qualified for financing.
Cash payment Vs. Financing
Foreigners are allowed to finance the property acquired through American banks and take advantage of the low interest rates of the USA. The terms for payment of the loan can be up to 30 years.
The financing approval process is relatively simple. Usually the entire procedure takes from 45 to 60 days. The customary documents requested by the banks are:
- Bank form with various information completed (each bank has its specific form);
- Brief resume/history/biography of the buyer/borrower;
- Reference letters;
- Letter issued by an accountant proving the income;
- Bank stay proving that your account balance is sufficient (usually from the last 3 months).
Usually banks ask for 35% to 40% of the value of the property at the entrance. The rest can be paid in up to 30 years. Interest rates in the US are around 3.75 to 4.5% per y.a. for foreigners (They are at the lowest historical level since 1970).
AMG International Realty has partners in Florida with long experience and great relationship with banks in the region. We offer all the advice for the approval of your loan.
If you are already pre-approved or opt for the cash purchase (cash), you can already proceed to the next step, which is the scheduling of visits and choice of the property.
STEP 5 – Scheduling visits and choice of property
Once you have chosen the region, the next step is to select the properties and schedule the visits (face-to-face or virtual) together with your broker. Most enterprises offer virtual tours through applications. The buyer can virtually walk around the property as if he were physically present. Your broker can also make a live video with you, walking around the property.
Here also the decision can be very personal. It is possible to buy ready-made apartments, launches (in the plant) and real estate already with a tenant inside (so you can see an immediate income in dollars).
STEP 6 – Buy by Individual or Legal Entity (company)?
You can purchase the property in Florida in your own name (PF – individual) or through a company in Florida, previously opened (PJ – legal entity).
The process of opening a company in Florida is free of bureaucracy, fast and cheap. Usually in 2 days the company is already open and the opening cost is usually between USD 300 and USD 500, depending on the counter. It is even possible to open over the internet at lower costs, but we recommend the advice of an accountant, because there are several types of companies and only a few will efficiently meet the purpose of the purchase.
Buying by the legal entity brings some tax benefits. One of them is the absence of inheritance tax. In Miami the inheritance tax for foreigners (in case the owner dies) can reach 40% of the value of the property. A heavy burden for the heirs. Buying through the company it is possible to be free of this tax.
Another way to compensate for the inheritance tax is to buy by the individual and take out life insurance in the amount of the tax. In case of death, the amount received by life insurance would be used to pay the tax. This should be well analyzed, because, depending on the age of the buyer, the insurance can be very expensive.
That is why it is recommended to consult an accountant in Miami to know the best strategy.
STEP 7 – Opening a bank account in the USA
Once you have chosen the property and the format of the acquisition (PF or PJ), it is time to start the procedures for the payment and closing of the purchase.
At this time it is recommended that you already have a checking account open with a bank in Florida. Opening an account with a bank in Florida is simple. Just present the valid passport and visa. There are banks that offer the possibility of opening an account remotely (remotely).
Although it is not mandatory to open an account, it brings some benefits, such as practicality in the transfer of values and also in the receipt of the rent (if you buy a property with the purpose of renting it in the future).
In addition, along with the ownership of the account, the account holder will have online access to the bank panel, account information and will be entitled to debit/credit cards and checks.
STEP 8 – Presentation of documents
For the cash purchase of a property in Florida the only usual document required is the valid passport. If the purchase is financed, other documents will be required for the approval of the loan. In this case, part of the documents must be delivered in the credit pre-qualification phase.
Step 9 – Payment and transfer of resources
The transfer of values is a customary international transaction. You can talk to the manager of your bank to guide you or hire the services of an exchange broker (we have some to indicate).
The transfer requires an exchange closing (exchange contract) and will be registered with the Central Bank.
At first, the money will be transferred from your account to the account you opened in the USA (Step 8). In a second moment, you must transfer the amount to a guarantee account, called Escrow Account. It is a kind of custody account, which is usually maintained by the Title Company, where the funds are deposited until all the documentation is analyzed by the Title Company. If there is no problem with the documentation, the closing is continued, where the amounts are transferred to the seller’s account and the deed is passed to the buyer’s name.
To better understand the role of AMG International Realty in your transaction, access this article.
STEP 10 – Post-purchase
Congratulations! You bought your property in the United States! What now?
After the purchase you can hire a company to manage the property. This way, you can rest assured knowing that your property is being well taken care of. All maintenance, cleaning, correspondence control, among other expedients, will be administered by the contracted company.
Management companies also do the total management of the rent for your property, if the unit is placed for rent. The services are complete and the owner does not even need to have contact with the tenants. Just designate a bank account to receive the amounts collected. The manager takes care of everything!
AMG International Realty has a full team and partners in Florida who offer all the advice also in the after-sales: accountants, lawyers, concierge service and Title Company. We also offer the administration service of your property.
Because of this high demand for real estate in the US, some American cities have suffered a real estate boom. The rise of the dollar did not seem to be an obstacle. On the contrary! Foreign investors are increasingly looking for a strong currency to get rid of the instability of the real and protect their investments.
About AMG International Realty
AMG International Realty is a global real estate company specialized in Florida. If you want to know more about the process of buying houses and apartments in the United States, contact us now!: +1 305-761-2655 (Heloisa Arazi).
