When searching for foreign real estate investment options, many investors’ minds usually jump toward investing in wealthier cities and expensive resale properties. However, the top priority when it comes to this should be (newly) developing cities. A great number of these can be found easily in the US, as it represents a balance between a strong and reliable economic force and an ever-developing market with new expanding cities adding to the list every day. Further, we will explain why you can find the best cities for foreign investment in the US. After that, we will list some of those cities.
Why is the US a good place to find cities for foreign investment?
Considering the exceptionally high gross rental yield of US properties (around 7.7 percent in 2021) and the still-growing property demand, the US real estate market has and will remain steady for a very long time. In ideal conditions, US real estate can be an incredibly lucrative option for foreign investors to put their money in. Besides being endowed with a well-developed infrastructure, properties ranging from single-family homes to big residential and commercial properties, the US market is also very liquid, making it relatively easy to pull out and sell the invested property.
A strong economy and a stable political and economic environment have created a steady growth in population. This, along with the US being one of the most popular global tourist destinations, gives this country a diverse and ever-growing rental demographic.
When it comes to financing, there are three main benefits of financing investment in a US city:
- Long-term mortgage financing is available even for foreign investors who don’t have a US credit history
- Low property prices compared to other global hotspots
- Capital tax deferral advantage for foreign buyers
Even with the US being such a lucrative investment option, finding the best cities for foreign investment in the US is not an easy feat. This is why we have decided to reduce the required effort for the investors with this list of such cities.
Investment city No1: Dallas, Texas
Dallas has recently felt a boom in population as it offers a wide range of job opportunities and a comfortable climate. Depending on the neighborhood, it can offer both a big city and a small-town experience. All of these conditions have made Dallas a very attractive place for the millennial population, creating a sizeable inflow of new residents.
A diverse and growing economy, paired with low living costs, has made Dallas one of the fastest-growing cities in America. The best part of this city’s economy is the diverse range of new job opportunities which have been attracting numerous people to it.
Financing investment in Dallas is made easy with the below-average investment property market values, accompanied by skyrocketing rental costs. Resale prices of homes in Dallas have increased by 20 percent in the past year, the only possible drawback to this being that most investors have to be quick to keep up with the rising prices.
Single-family homes are the best type of real estate to focus on currently in Dallas. Texas currently represents a generally good state for investing, even outside of Dallas (Austin, Houston).
Investment city No2: NYC, New York
NYC is comprised of five boroughs, all featuring a diverse population. These differences in economic class or demographic cohort allow for a wide range of investment properties (from office spaces to townhouses). It is one of the most popular cities for people in the diaspora, making population growth fairly steady over time.
New York has a lot of variation in economic success. You can find good investment opportunities both in richer and developing neighborhoods, as well as in poorer ones. New York City offers one of the widest ranges of jobs in the US.
What makes financing in NYC special compared to other major cities is that even the poorest NYC cities feature relatively high rent values compared to other cities in America.
Most office spaces in Manhattan used to draw people who wanted a shorter commute to work to seek housing there. Lately, with the introduction of online working from home, people have been turning to townhouses in other boroughs—mainly Brooklyn. When it comes to rental investments in Brooklyn, this area is very popular as a new residential area made to combat the commercially focused Manhattan.
Investment city No3: Charlotte, North Carolina
A highly educated population currently utilizes the majority of Charlotte. Besides that, the many entertainment and recreation opportunities have lately been attracting many young Americans.
The best attributes of Charlotte when it comes to the economy are:
- It is a place with multiple Fortune 500 companies that stabilize its economy
- Represents a central transportation hub
- Offers a highly diversified job market
- It is ranked as the 7th best city for finding a job, which brings new people in regularly
Charlotte’s real estate market value has been rapidly increasing in recent years. Between 2012 and 2017, average home values increased by over 100,000$.
When investing in Charlotte, you should mainly focus on commercial areas. This is because the biggest reason for moving there has recently been new job opportunities for young people who want to live close to their workplaces and entertainment options.
Investment city No4: Atlanta, Georgia
The population in Atlanta has increased tremendously in the last decade (13,54 percent increase). As it houses a wide variety of lifestyles because of the different neighborhoods it has to offer, it is an incredible place for real estate investment. From luxury in Buckhead to historic homes in the Cabbagetown district, Atlanta has a place for anyone.
Atlanta features a booming tech industry and one of the busiest airports in the world.
In the past five years, home values in Atlanta have grown by 74 percent.
What really makes Atlanta one of the best cities for foreign investment in the US is the many cultural sights that attract tourists. This makes Atlanta one of the best cities for temporary rental investments (hotels, motels, etc.)
Investment city No5: Orlando, Florida
When it comes to tourism, Orlando is one of the most visited cities in the world. This is mainly because of major events and convention traffic. Orlando is generally a great place to live. It features great schools and vibrant culture. Many people who move to all of Florida are retirees, and Orlando is no exception when it comes to this.
Besides tourist attractions, comfortable housing, and living conditions, many people are attracted to Orlando because of its growing hi-tech industry. A great number of new employment options are opened every year. Orlando is one of the US’s most important business and commerce cities.
Orlando offers great long-term residential properties. This can mostly be attributed to its strong returns.
As Florida has become a popular retirement destination, we advise keeping close contact with tenants through online communication or property managers. Older adults might sometimes need your help or advice, especially with finding movers. You can easily find them some help with the move through services like bestmovers.nyc, which connect you with moving companies that you can recommend to your tenants.
The best cities for foreign investment in the US are the ones that you are familiar with investing in
All of the cities on this list have their individual strengths, weaknesses, and focuses. While these are the best of the best, the choice between them or any other city in America comes down to the investors’ priorities. If you have more experience investing in rental office spacing, places like Atlanta and Charlotte are for you. But if you’re more comfortable investing in living spaces, we recommend focusing on places like Orlando or Dallas.
You should always make sure to keep up with what is happening on the market by following relevant websites and sources so you can always be sure which cities are the best for foreign investment in the US.