An excellent investment portfolio strategy helps you stay on track and work to achieve your financial goals. When you choose to invest in property, particularly in the U.S. as a foreign investor, you will need a well-considered strategy to implement. You want your property investment to be a success, so you need to know your investment strategy before you purchase a property.
Your strategy will change depending on your financial goals, current finances, and what you need to achieve from your property investment. When investing in the U.S., you’ll buy a property that matches your strategy. Suppose you need a regular income from a residential rental property in the U.S. In that case, there is little point in purchasing a property that needs extensive renovation before getting a tenant.
When comparing properties to buy within your budget, the final decision should align closely with your investment strategy. If you have a property coach, the coach can help you to ensure that your system or plan for investment will meet your financial needs and goals and that the property you select will successfully align with your strategy.
How to Start with a Successful Strategy
Investing in U.S. residential property is a great way to make money, but knowing which property you should buy can take time and effort. A successful investment strategy will start by considering what you need to achieve. Your plan will consider your finances, how much you can spend on a property and associated expenses, and when you need a cash injection to meet a long-term financial goal.
Do you want a fast profit, buying and selling a property within a few months? Alternatively, do you need a steady and regular income from your property investment? Does your strategy mean you want payments for a few years and then plan to sell when the property value increases in five years? Are you investing in U.S. property to create a deposit for a property in Australia or New Zealand in the future?
If you answer the above questions, you’ll know your financial goals – or what you want to achieve from your investment strategy. After setting your financial goals, you will need to define what sort of property will help you to meet these goals.
As a new investor, it can be challenging to know all the intricacies of investing in a property, especially when the property is overseas. Accessing local experts and people with the right experience can help you ensure your investment strategy will succeed. A good property coach or a mentor with experience and knowledge of the current U.S. residential property market can help you finalise your process.
Matching Your Strategy to a Property
Once you have a strategy to reach your financial goals through property investment, you’ll need to select the right property. There is little point in buying a property with an established tenant happily paying rent regularly if your strategy is buying a property that you can flip within a couple of months.
If you want to flip a property, you want to buy a property in an area where the property is becoming more popular or demand is growing for properties in that area. You also want to consider a property with solid foundations, and a few renovations or cosmetic changes could dramatically increase the property value when you sell.
Alternatively, if your strategy is about gaining a rental return to increase your income, you would like to buy a property that does not need extensive (and expensive) renovations before getting a tenant to pay rent.
Knowing which areas in a city or country region are experiencing growth will affect where you purchase a property. According to your strategy, understanding how much profit is likely when you plan to sell the property will help you choose the right property for your needs. Local knowledge and expert understanding of how properties increase in value in different regions will enable you to be sure your U.S. property investment will be a success.
As a foreign investor, investing in U.S. property can be challenging, especially if you need more knowledge of geography, the current housing market, and where experts predict growth. If you connect with a property coach or access a mentor’s or training program’s expertise, you’ll have the advantage of accessing the local knowledge you need. You certainly want to avoid buying a property in a declining town, where shops are closing, and people are moving out of the region.
Steps to Buy Your Perfect U.S. Investment Property
You have your strategy for U.S. property investment. You know the property you are looking for and have obtained expert advice to locate the perfect property to meet your plan. All good, but how do you move from planning strategy to purchasing your property in the U.S.?
You will need to complete several steps before you can buy a property in the U.S.
Step 1 – Limit Liability
Creating an LLC (Limited Liability Company) will provide you with asset protection and structure that ensures you can create wealth.
Step 2 – Obtain the EIN
You will need an Employer Identification Number to pay people for work completed in the U.S.
Step 3 – Set up Insurance
You will need property insurance in the U.S. to protect the properties you purchase. While you may need to finalise the individual property insurance once you have the property address and the sale is complete, researching the company and property insurance you need will help protect your wealth creation business early on.
Step 4 – Review Your Taxation
When investing in a foreign country, you will need to know the taxation rules for both countries, so talking to experts in foreign investment taxation can help you with your tax situation.
Step 5 – Decide on Foreign Exchange
You will need to use a reputable exchange service or system to exchange your AUD or NZD for USD and vice versa. Minimising charges on the transfer of funds will help reduce your investment costs.
Step 6 – Source Property that Matches Your Strategy
After completing the setup, you can now source the property that matches your investment strategy, considering how much money you can spend and the properties that will meet your financial goals.
Step 7 – Select the Property
Once you select the property you wish to purchase, you’ll need to deposit.
Step 8 – Perform Due Diligence
When purchasing any property, you must ensure the building is sound and that no pests like termites are invading the property and eating your profits. You need to know that the person selling the property has the legal right to do so, and you won’t become responsible for debts on the property.
If planning a renovation or works on the property, you will want to ensure you do due diligence on any tradespeople or companies who will work on your property. Due diligence includes a title search, property inspections and reports, and rental reports on the property.
Step 9 – Finalise the Sale
You can finalise the sale and close the deal if everything checks out in the due diligence phase.
Step 10 – Connect with a Property Manager
Your property manager will help you to manage tenants and all maintenance requirements. You will need to trust your property manager to manage your property.
Step 11 – Obtain Insurance
At this point, you’ll need to obtain property insurance to protect your investment from damage.
Step 12 – Source Tenant
You will need to attract the right tenants, including considering the capacity and ability to pay rent and people who will not damage your investment property.
Knowing whom to trust and who will protect your investment property can be challenging, primarily when you invest in a different country where you cannot simply walk past the property to see the condition.
Your investment strategy will be successful if you can access the correct information and local property knowledge. Access to a suitable property coach, who has become an expert in U.S. property investment, will help you tremendously.
Star Dynamic knows the U.S. property market and can help you to set and achieve a successful investment strategy that will suit your circumstances and financial goals. Reach out to us today to discuss how we can help you.