Real Estate Investment in USA (FAQs)
Have questions about property investment in USA, or USA real estate investment? FuturePlan will assist you with best USA property investments.
We believe an educated investor purchasing real estate investment in USA, is a confident investor who therefore makes better decisions. Examine our frequently asked questions about property investment in USA and be assured FuturePlan is the right partnership for you.
How can I see where the property investment in USA is and get assurance it actually exists?
- Digitial birds’-eye view
Use Google Earth’s ‘Street View’ to see the property investment in USA from all angles as though you are actually there.
- On-site inspection
We personally visit the property investment in USA and carry out a physical inspection.
- Title examination and title insurance
This is arranged through a third party, giving you confidence the seller owns the property investment in USA and no money is owed.
- US public records verification
All property investment in USA sales in the US are on the public record and you can login to the relevant government website to confirm rates and owner information.
- Lender verification
The lender will do their own verification since the property investment in USA is the security on the loan and all loans are non-recourse.
Can I leverage my real estate investment in USA to buy additional real estate?
Yes, but only if the real estate investment in USA is classed as a stand-alone investment. Real estate investment in USA owned within a Self-Managed Superannuation Fund (SMSF) cannot be leveraged.
Are there risks associated with an investment property in the USA?
There are risks involved with any investment property in USA. It is our job to manage those risks by helping you do things right. We have outlined the various steps we take to ensure your risk in an investment property in USA is managed in the best possible way. These considerations include:
- Setting up correct procurement structures both in Australia and the US.
- Identifying a positive cash flow property in a good area.
- Selecting the right property manager.
- Filing your taxes correctly.
Getting any of these items wrong can have a substantial impact on your investment property in USA and ability to return a profit and can diminish the investment’s value.
FuturePlan Property prides itself on being meticulous in carrying out these services on your behalf in your quest for investment property in USA.
What happens if the property investment in USA isn’t tenanted?
Because purchase prices are so low, your holding costs are minimal. If your property investment in the USA falls vacant for a month, typically the costs would be a fraction of the vacancy costs on an Australian property.
What happens if the property investment in USA burns down or is severely damaged?
You are covered under a ‘hazard’ insurance policy. This typically insures you for 20-30% more than what you paid for the property investment in USA.
What happens if the tenant damages the property investment in USA?
Property managers hold a minimum of one month’s bond for each tenancy. If your tenant damages the property, typically that one-month’s bond will be used to cover repair costs.
What happens if the tenant does a ‘runner’?
The property managers hold one month’s bond, which helps to cover your lost rental income while they work to secure a new tenant.
What happens if the tenant doesn’t pay rent?
On the 5th day of non-payment the property manager sends out a warning. On the 10th day a legal letter is sent out, and by day 15 court proceedings commence. At this stage the tenant usually pays their rent. If not, eviction is sought, which takes about six weeks (similar to Australia). Filing for eviction typically costs around $350 USD.
How long does it take to settle a property investment in USA?
Renovated properties will take around six weeks to settle from the date of your contract signing.
What if something goes wrong with my property investment in USA?
As a landlord, many things can happen, but you can always rely on us to act on your behalf of your property investment in USA. One of the main reasons we have an office in the US is to ensure we can handle all our clients’ needs in a prompt and efficient manner.
What are the tax implications in Australia when owning a property investment in USA?
As long as your property investment in USA is structured correctly you will not pay tax twice. Under the tax treaty between Australia and the US, you will pay tax (if applicable) in the US and receive a tax credit when you complete your Australian taxes. Let’s say you purchased your property investment in USA through an SMSF and the applicable Australian tax rate was 15%. If you paid 10% taxes in the US on that one property then that 10% would be credited here in Australia. You would only be responsible for the difference of 5%.
Can i pay off my loan faster and are there any penalties for doing so?
Yes, you can pay off loan with no early-payment fees.
What are the interest rates?
Current interest rates for property investment in USA are as low as 8-10% and we are always on the lookout for lower rate with reputable lenders.
Why are interest rates so high?
US banks will not typically lend to foreigners. You are considered high risk because you live in another country with different laws, lending policies, credit reporting, etc. Australians must use SECONDARY lenders who account for the extra risk by charging higher interest rates and taking larger deposits.
What are the tax benefits in the US on new properties versus older, established real estate?
You can depreciate new structures over 27.5 years so will reap greater tax benefits from new property purchases.
How do i bring my cash back to Australia?
We use a well-known international currency-trading company called OzForex. We order a fund transfer and send a signed form to the bank. The bank then pays the funds.
OzForex is usually about half a cent more on the dollar than the going exchange rate, whereas banks are generally four-to-fice cents higher plus fees.
Are there many bank fees in the US?
There is nominal monthly account-keeping fee (usually around USD $5), much like here in Australia.
Is lanlord’s insurance available?
There is no landlord’s insurance in the US, per se. However there is hazard insurance, which covers you for damage, all acts of God, fire and public liability. Please consult your insurance policy or company for details.
What happens if FuturePlan or one of the other businesses services shuts down?
One of FuturePlan’s major roles is to introduce you to all the services necessary to have successful property investment in USA. Many of these businesses in out partnered alliance have been around for more than 15 years. FuturePlan has organised your services to work together, but completely autonomously from one another. With FuturePlan’s help you can be assured that if one link in the chain fails, you can simply replace that service with another provider. In saying that, we plan on being here for many years to come.
How much are the settlement costs for a property investment in USA? Are they as high as Australia?
Settlement costs are nowhere near as expensive as Australia. First of all, there is no stamp duty to pay in the US. Costs such as conveyancing, government charges and some of your rates are also included in your US settlement costs!