The influence of foreign investors and their potential to help the housing market hasn't been lost on legislators, it is reported that Senators are introducing a bill that would grant visas to any non-U.S. citizen who spends at least $500,000 on residential real estate in the United States, which they believe will help fuel demand.
"A new provision to an immigration bill already being considered by the U.S. Senate was proposed last week by Senators, Chuck Schumer of New York, and Mike Lee, of Utah that would grant residence visas to foreign buyers spending a minimum of $500,000 to buy residential property in the U.S.
The 'Resident Visa' provision to the immigration bill was written with the purpose of boosting and energizing the slow U.S. Housing market by encouraging foreigners to purchase U.S. real estate. If accepted, this provision would compliment other foreign visa actions proposed in the bill that would encourage more spending and capital investment by foreigners in the United States.
There are some stipulations. Here are some of the highlights:
At least $250,000 must be spent on a residence and the balance would be allowed for residential rental/investment properties.
Foreign buyers must pay for their purchases with cash, pay U.S. taxes and spend a minimum of 180 days in the U.S.
Foreign buyers granted visas would not be able to work in the U.S without obtaining a work visa via the normal and proper channels.
Foreign buyers would be able to bring their spouse and any children under the age of 18 with them.
The 'Residence Visa' would expire when the property/properties are sold."
Florida Attracts Foreign Investors
Florida, known as 'The Sunshine State', is again attracting buyers who are finding bargains galore. Although the USA claims to have been out of recession for the last 12 months, it is possible another dip may happen due to weak consumer confidence and tight lending criteria. But for the long term, Florida is bursting with opportunity.
Florida was riding the boom to its highest peak, but now homeowners are finding the value of their properties 50% less than five years ago. For example, a four bedroom villa with a swimming pool in the Orlando area, 20 minutes from Disney, is on the market now for £111,000.00. You could buy a property like this for 30% down plus expenses. So an Investment of around £41,000.00 could see you earning a yield of around 6%. Current thinking is that worst case scenario in the present market could see you break even with only the equity to show for your investment, but the market is expected to Improve, but without a crystal ball, as mentioned, another dip in the market is possible.
The opportunity has an unfortunate side, at least 50% of bargain homes are the result of foreclosure or short sale, which is the process before foreclosure. However you may feel about benefiting from the unfortunate business of foreclosure, it does help those who are at the short sale stage and the banks are happy to have it sold. These transactions can be complex, so we do advise you seek personal legal advice. It would be advisable for you to visit Florida and see these properties for yourself, as some may be in disrepair and in need of more work than you may be willing to take on. A good buy would be near golf courses, of which there is hundreds to choose from, beaches of the Gulf of Mexico coast stunning, as are the beaches along the East coast. Of course a popular spot to buy is near the amusement parks in and around the Orlando area.
All the most popular areas have great transport connections from Europe to Miami, Tampa and Orlando.
Miami is leading the sales revival in the sunshine state. The data from the Miami Association of Realtors shows that sales of existing single family homes in the Miami Metropolitan Area increased 47% in July, and sales of existing condominiums increased 33%. Buyers are focusing on homes in just five locations which are: Tampa Bay including St. Petersburg and Clearwater. Miami, Miami Beach and Fort Lauderdale. Orlando and Kissimmee. Naples and Marco Island. Cape Coral and Fort Myers, all in the southern half of the state and was hit particularly hard by the housing downturn. Inventory fell more than 6 per cent between second and third quarters of 2011, driven largely by foreign investment, experts say. Canadians led sales overall, accounting for almost a quarter of foreign home buyers, followed in smaller numbers by China, Mexico, India, and the United Kingdom.
For those Investors in the enviable position of having cash at their disposal, real bargains can be picked up with banks preferring to sell to a cash buyers at discounted prices, rather than a lender willing to pay the asking price.
Let's look at some of the main points to consider when taking those steps to buying a property in the sunshine state.
1. Pick your location wisely. This is important first step.
2. Enlist the help of a reputable realtor (property agent) that knows the area and will guide you through the process.
3. It is prudent to allow for approximately 5% of the property value to cover costs such as notary fees, title insurer and any other various legal costs.
4. Once the ideal property has been found and price negotiated, it is usual for the purchaser to put down a deposit. It is at this point followed by a formal offer, accompanied with a purchase contract. Once this is signed, the sale is binding.
5. One of the most important criteria when purchasing property in the USA is timing. Contracts are usually date specific and should be adhered to, or risk losing your deposit.
6. It is possible to find finance in the USA as a foreign buyer and US mortgages are available from 70% - 80% loan to value.
7. Obviously it is up to the individual to fully understand all visa requirements, which will be needed for various durations of stay in the country. All information on this can be found at your nearest American Embassies, Consulates, and Diplomatic Missions in your country.
Tony Osust, director: Holprop.com
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