FAQ

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WHY INVEST IN REAL ESTATE IN THE UNITED STATES?
In 2001, the United States saw the development of the subprime market, mortgages that gave low-income people access to loans.

  • On the one hand, lending institutions were hedging with very high-risk premiums.
  • On the other hand, granting loans to people with modest incomes also allowed them to apply for a guarantee from the State.
At the same time, receivables were converted into marketable financial securities (securitization). Some borrow, others invest, and the financial institutions were protected. The lenders only repaid the interest on their loan and, thanks to rechargeable mortgage loans, they could increase the amount of their credit if the price of their house increased.

For a while, everyone was winning, and the system seemed to be working well.

However, from 2004 to 2006, the US Federal Reserve gradually increased its key interest rate from 1% to 5.5%. This lead to a significant increase in the total amount of mortgage repayments that many borrowers, especially the most fragile, found themselves unable to honor their monthly payments.

These defaults led to evictions and seizures (foreclosures), then a fall in the price of real estate. The creditors then had to resort to making short sales, selling their real estate at a reduced price.

In 2007, the stock markets collapsed, and the bank run era was born: customers withdrew their savings from banking institutions to avoid losing everything.

Throughout 2008, the banking and financial crisis took on a global dimension.
WHY CHOOSE NYREF?
Our extensive network of partners allows you to invest in New York City with complete peace of mind. By ensuring efficiency, performance, and transparency, NYREF offers a service of the highest quality. Our philosophy: your return on investment, without loss of time or extra cost.

Rely on our expertise and experience, and choose to invest in our development projects in New York to benefit from:

- attractive investment environment;

- a low tax rate in compliance with US legislation;

- turnkey support for all your investment in the United States.
WHY INVEST IN NEW YORK?
Choosing to invest in real estate in New York City requires knowing how to seize a great opportunity.

Why? First and foremost, because the value of real estate tends to increase. Buildings remain a profitable and sound investment, especially in New York.

To make a small comparison, real estate investments in New York are on average 2 to 3 times more profitable than in France. Besides, the US economy is very reliable and allows a relatively constant rental return. That is why more and more investors are interested in US real estate, especially in development projects in New York City.

As evidence of this confidence, from March 2016 to March 2017, approximately 284,000 US homes were acquired by foreign owners, and in 2017, non-residents alone invested nearly $ 74.9 billion in the US real estate market.
YOU DO NOT NEED TO BE AN AMERICAN RESIDENT TO INVEST IN THE UNITED STATES!
It only takes a simple tourist visa to acquire real estate in the United States provided you have the right partners for your project.

That's why a partnership with a local partner like NYREF is THE perfect solution.

Indeed, to manage your investment, you will need to open a US bank account, create a Limited Liability Company (LLC), obtain a federal identification number or an Individual Tax Identification Number (ITIN) for all your exchanges with the Internal Revenue Service (or IRS, the US equivalent of tax services).

As many steps and operations are facilitated and supported by NYREF, we are the ideal partner to simplify your life and enjoy your investment with confidence.
TAKE OUT A LOAN IN THE UNITED STATES?
Banks cannot under any circumstances refuse you a mortgage because you are a foreign investor. However, let's be realistic, if you are neither a US resident nor a US citizen and you do not have a social security number, US financial institutions will undoubtedly conclude that you present a high risk of non-repayment. On the other hand, the conditions for granting a loan are drastic in the United States, even for locals, and even if you find a bank ready to give you credit, the conditions will be so expensive that your return on investment will cease to be attractive which will defeat the purpose of your investment.

Unless you can obtain an unallocated loan in your country of residence, which would allow you to buy your property in the USA freely, it is preferable to pay cash to invest in US real estate if you are a non-resident.
HOW TO FINANCE AN INVESTMENT IN THE UNITED STATES AS A EUROPEAN CITIZEN?
For a European, buying real estate in the United States is the guarantee of enjoying a diversified heritage and a sustainable investment. However, for your project to come to life, you will first need to find a reliable source of financing, because unless you have your own funds, a bank loan is usually a necessary step to invest in a building.

What are the most advantageous sources of financing for a European investor in pursuit of the American dream?

To find out, Contact us!!!
TAXATION OF REAL ESTATE IN THE UNITED STATES
Taxation? Unfortunately, this is often an aspect that is overlooked at the time of the purchase of the real estate. In addition to the federal taxes that apply to everyone, you may also be subject to state taxes, such as those of counties and/or municipalities.

Moreover, even if the tax treaties of August 31, 1994 (governing the income and wealth taxes) and November 24, 1978 (on inheritance and gift) concluded between France and the United States make it possible to avoid double taxation, they do not constitute in any way a reliable guide to navigate the pitfalls of the American tax regime.

NYREF will help you avoid all these pitfalls and omissions so that you can get the most out of your investment with confidence.

In general, regardless of your tax status, the federal government will ask you to pay the rental income tax and the tax on capital gains realized on the sale of your property.

Rental income is subject to federal income tax (up to 39.7%), possibly Medicare Tax (3.8%) and relevant state income tax (14% maximum). However, all expenses (interest on the loan, common expenses of the building, property tax, insurance, management, and repair costs) are deductible.

The property tax depends on the state, as well as the local community, in which the property is located, and is deductible from income subject to federal income tax. It is also important to remember that the French wealth tax (ISF) is imposed on the global assets of a French citizen. An American property may, therefore, be affected by this tax, unless it is subject to special exemptions.

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BUYING REAL ESTATE IN THE UNITED STATES VIA AN LLC
The purchase of real estate via an LLC is a fairly common practice in the United States, and real estate agents, accountants, and lawyers often recommend this structure, regardless of the state in which the property is purchased. Indeed, the creation of an LLC, or Limited Liability Company (the equivalent of a French SARL), has many advantages for all those who wish to make a rental investment in the United States.

The first objective of this structure is legal because it protects the owner of a property by limiting his/her liability. However, it can also be attractive from a tax point of view as it simplifies the transmission of wealth in case of inheritance.

The creation of an LLC is a relatively fast and straightforward legal process. Once the structure is set up, it only takes a few days to obtain an EIN (Employer Identification Number) from the tax authorities and to open a bank account in the name of the company.

It is best to anticipate the operations and create the LLC before the purchase of the property. However, "there is a possibility of creation within one month between the signing of the purchase agreement (the equivalent of the “compromise de vente”) and the closing. It is also a good time to think about a more efficient structure from a fiscal point of view.”

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