Wealthy US citizens have taken to offshore investing primarily because of the tax advantages. However, when it comes to real estate investments you might get into trouble with the IRS if you don’t know when to declare assets or not.
To help you sort things out, here’s a simple guide to offshore real properties:
1. You do not have to declare you real property in another country if you own its as a private individual.
2. You are required to report income you make from your foreign real property (e.g. You rent it out.).
3. You need to declare any real property and income you have/make if you form a foreign entity, whether a corporation or trust.
This is true for all US citizens, whether you live in the US or not. It is true for permanent US residents (non-citizens) as well.
So while real estate property in a foreign country may sound really good, you might want to stick with stocks and other financial instruments if you don’t want the headache that tax complications brings, especially if your purpose is for real estate investments.
Investing in real estate can be really scary, especially if you don’t really know that much about the real estate market. Still, if you are looking to diversify your investments and go beyond stocks and financial derivatives, the real estate market should be something you should look into.
The good news is that you don’t really need to be an active participant in your real estate investments due to an innovative crowd funding platform called RealtyShares.
RealtyShares helps you get started in investing in real estate by letting you passively invest small amounts of money into direct real estate investments, both in residential real estate and commercial real estate. All you need to do is sign up for an account, browse the list of properties and read up on the ones you’re interesting in (You can also ask questions), choose which ones to invest in, and fund your investor account. You can do all this on your computer and get reports on your investments just as easily.
Owning a real estate is very much similar to starting a business. It must first be the case that the buyer is sure of what he or she is about to enter to. Under this falls the need of one being sure of what is wanted such as which location to choose, what specific type of real estate to buy, and the purpose behind buying. One must as well have that enough money to cover starting and coming expenses. After all those things are ensured, the interested buyer can now choose which real estate to buy. Together with this, it is definitely helpful to have someone to assist you, someone who is experienced such as a licensed real estate broker. Once these aspects are finalized, the buyer can then start making necessary payments and start complying with the needed requirements still with the help of the broker. Owning a real estate, as well, involves proper documentation of all papers and contracts to have enough proof incase problems on ownership arises in the long run.
Every investor aims to end up with the best and most beneficial real estate. What must one consider to attain this? A successful real estate deal is only possible when the following aspects are carefully thought of: options and benefits. Indeed, it is not that difficult to find that real estate property that will interest and satisfy the buyer because they are presented with numerous options. Buyers should always understand the importance of maximizing options. It is a must to make the most out of all offers and references that appear to be readily accessible because these are not made to confuse the buyer but for them to have a specific standard and eventually lead them to choosing the best deal. Nonetheless, real estate deals are at its best if its benefits are as its best as well. Always go with a property and agree to a deal that exhibit good investment and never settle on location and look but always consider quality and benefits.
Real Estates are made and bought for varying purposes that all depend on the interest of the buyer. There are those that buy a real estate for residential purposes. The investor, for this purpose, earn through rentals. Under residential real estates are condominiums and apartments which are usually leased for the purpose of having that comfortable home or place to stay. On the other hand, real estates could as well be bought and used for commercial purposes which is actually the most common and evident use of real estates. These include establishments such as malls, restaurants, parks, and even stores. The varying purposes of real estate go to show that a simple interest of investing could lead to one having that source of living. It is always beneficial to think long term. Spend on the right things and always go after something that will benefit you most which includes choosing the best purpose for your obtained real estate.
Real Estate agent acts as a bridge between the seller and the buyer. More than this, it is always ensured that these agents are credible, this is why they are licensed and proved to be capable and experienced in such kind of deal. There are several tasks that this agent covers which vary in difficulty and requirements. As the very start of a real estate deal, the agent’s role is very much needed mainly because it is almost always the case that they look for the location or real estate property considering the interest and preference of the buyer. Real estate agents are as well responsible in making sure that all needed requirements of both buyer and seller are complied. Nonetheless, they assist in every aspect of the deal; they work toward having an agreement that is beneficial to the parties involved. These varying roles of real estate agents can as well be referred to as their source of income. In every task and transaction, they equally benefit in the form of a commission.
No matter which type of real estate market you plan on investing, whether it be residential or commercial real estate, one of the most important factors you have to consider is location.
Unless you understand just how significant the effect of location is on real estate prices, you’ll end up gambling each time you make a decision, which is never a wise way to approach investments. On the other hand, keeping in mind the importance of location will allow you to make sound decisions when investing in real estate since you can judge more subjectively the difference in prices in different locations, as well as better predict the market trend for each location you are considering. After all, just because commercial real estate is improving in some locations this year does not mean that it is a better option than the residential real estate market in certain areas.
So make sure that you do your research for the specific area you are eyeing before even narrowing your choices down to specific properties and investing your money in it.
Dabbling in real estate as an investor is never a sure thing. If you are to invest in real estate these days though, it might be wise to just overlook the housing market for a bit and put your money into commercial real estate.
According to Forbes, the commercial real estate market is improving at a steady and decent rate with the office spaces showing the most significant growth both in terms of occupancy rates and rental increase. Industrial and retail spaces are also doing well, though not as well as office spaces. There is also reason for concern when it comes to retail space since retail spending, which is not increasing that much, could hamper the growth of the retail space market. I guess it’s safe to say that people are learning not to use their credit cards excessively these days. Still, compared to the housing market (e.g. apartments and condo-hotels), the commercial sector is still a relatively safer bet if you are to invest in real estate this year.
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In a post last year called Rent or Buy, we mentioned how buying is the better option over renting. The scenario presented made a lot of sense with the source pointing out that you will end up spending about the same amount of money on your mortgage as you would on rent plus all other expenses if you live in one place for about 3 years. With that, it was concluded that it would be better if your money at least went towards mortgage payments.
While the math adds up, what you should realize is that sticking to just renting may still be the better financial decision for you. This advice is for wanna-be home buyers who are just not financially healthy enough to make long term financial commitments. This includes people who do not have a steady source of income, have nothing in saving, and those currently in debt. After all, even if you diligently pay your mortgage for 3 years, the house can still end up foreclosed if you lose your job. This wouldn’t be too bad and will just seem like you paid rent for 3 years if it didn’t leave you saddled with a huge unpaid balance on your mortgage.
So always take into consideration your specific circumstance before making decisions when it comes to something as big as buying real estate.
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The kind of real estate property you buy depends largely on your purpose. While it is true that buying a home is always a huge investment, those that buy property for the sake of investment alone know how different their process of choosing is from ordinary home buyers.
As someone who is on the lookout for a house you can call home you definitely want to get a property that will go up in value over time, but this is not your main criteria for choosing. Instead, other factors might weigh in more like the neighborhood, a good layout for your kids, etc.
On the other hand buying a home as a financial investment takes the emotions out of the equation. What you look at are figures like housing demand in the area, potential ROI, and other factors that could affect your profit.
Whatever your purpose might be though, the important thing is to plan properly and weigh all the factors that are important in your situation so that you come up with the most suitable choice in the end.
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