Many new immigrants plan to purchase property in the United States. Whether for personal residence or investment appreciation, it is an excellent way to manage wealth through international asset allocation. So, what exactly should one pay attention to when buying real estate in the United States? WorldWay's U.S. immigration experts introduce several key issues to consider when purchasing U.S. property.
How to choose between new homes and pre-owned homes?
In the United States, the majority of homes traded on the market are pre-owned, accounting for 85% of total listings; newly built homes are relatively rare, accounting for only 15%. Generally speaking, new homes are usually located in more remote areas or cities, belonging to newly developed regions. In contrast, mature cities, having undergone long-term development, possess superior school districts, comprehensive living facilities, and beautiful environments, but most of their residential properties are not newly built. Many of these cities were planned and developed as a whole, usually completed over 15-30 years, and homes within each city will have similar ages.
If you want to buy a new home, it is not impossible, but the house you buy might be in a newly developed small town surrounded by other new homes, where infrastructure may be relatively less developed. Therefore, do not approach the house-hunting process with the mindset that you must buy a new home, as this will limit your options and cause you to miss out on many good properties. On the other hand, choosing a newly built home often comes with sacrifices in other areas, such as immature urban development, inconvenient living, or poor school districts.
Of course, there are exceptions: some developers may tear down old houses in mature cities and rebuild new ones, but such cases usually involve properties that were over 50 years old.
Are older homes less valuable?
The answer is: not necessarily; it requires a comprehensive analysis based on specific circumstances. In the United States, old houses are not necessarily less valuable or undesirable; their value can vary greatly depending on the condition of the property.
On one hand, the building structure of a house will inevitably deteriorate and depreciate over time. For wooden houses, one can generally view every 10 years as a stage; without maintenance and renovation, the older the house, the lower its value. If the equipment has never been updated, a house over 40 years old can be considered quite old and has almost no building value. However, if the owner maintains and renovates the house properly, its value may still be very high.
In short, when choosing a house, you should look not only at its construction year but also at its internal maintenance status and whether it has been recently renovated. If a house is well-maintained, the overall value of most properties will rise over time. Of course, the opposite is also possible; if the local environment deteriorates or the economy declines, the value of the house may also decrease.
Is it good to buy in a school district?
Whether to buy a property in a U.S. school district should be considered based on your specific circumstances. Due to high demand, homes near schools are relatively more expensive and generally carry a premium compared to similar properties elsewhere. This premium reflects the advantage of homes near schools—it is more convenient for children to attend school. However, there are also disadvantages: the environment near schools can be noisy, which reduces living comfort.
If the property is purchased for rental purposes, homes near schools are easier to rent out. For example, if the average rent for similar local properties is $2,000/month, a home near a school might rent for slightly more, such as $2,100 or $2,200/month; therefore, the annual rental income for properties near schools is indeed slightly higher.
Should I choose a townhouse or a single-family home?
Townhouses and single-family homes are very different, but both have a market for both sale and rent. The difference between the two is: townhouses generally have no yard or a very small yard, so the land area is small, and the price difference is not large, ranging from $100,000 to $500,000 or $600,000. Single-family homes have larger land areas, and their sizes and internal facilities vary wildly, so the prices of different single-family homes differ significantly, ranging from $200,000 (in less desirable cities) to tens of millions of dollars. In some less desirable cities, there are also single-family homes for around $100,000.
If the property is purchased for rental, the rental yield of a townhouse is relatively high because the initial investment is smaller; however, single-family homes have greater appreciation potential. Therefore, as an investment, both have their own advantages and disadvantages.
If you have to choose between the two, first look at your budget. If your budget is less than $200,000, you don't need to consider single-family homes. If your budget is between $200,000 and $500,000 or $600,000, both can be considered, and you can choose based on specific circumstances and your preferences. If your budget is over $600,000, you can consider buying a single-family home or buying several townhouses (in the case of investment).
Which city should I buy in?
First, determine your home-buying budget: how much money can you afford to spend on a house? By combining your budget and other factors, you can consider which city to choose. U.S. cities have specific real estate parameters, such as average residential price, average house age, average living area, average unit price, and school district scores. These real estate parameters will be important bases for choosing a city.
Relatively speaking, Chinese people buying homes in the U.S. mainly favor locations in Los Angeles, San Francisco, New York, and Boston. Industry insiders state that the expansion of new towns in the U.S. is far less rapid than in China. The common practice in China of buying in cheap areas and waiting for appreciation as they develop is difficult to implement in the U.S.; one should focus on choosing mature areas with good development.
Because the U.S. has the best education in the world, the number of Chinese students studying in the U.S. now exceeds 100,000 per year. Therefore, the related demand for property is enormous. The vast majority of Chinese people consider education needs when buying a home, planning for children who are about to study in the U.S. Consequently, cities and areas with educational resources have become the most popular regions for Chinese people to buy homes in the U.S., such as New York, Los Angeles, San Francisco, Atlanta, Houston, Seattle, and Las Vegas. Chinese people buying U.S. property do so for both investment and self-residence, and some use the property to support their children's education or for retirement.
How to choose a suitable property based on the purpose of purchase?
1. If it is to diversify asset risk? Do not consider too much short-term gain.
2. If it is for investment? Do not have expectations that are too high: it is unlikely that U.S. real estate will rise sharply like it did in China over the past 10 years. Entering the market with expectations of a surge will likely lead to disappointment.
3. If it is for residence? Focus on the convenience of life and areas with high concentrations of Chinese residents.
4. If it is for children's schooling? Most Chinese people will list this factor as the top priority. The U.S. also has the concept of what Chinese people call "school district housing." Good school district homes are generally significantly more expensive than surrounding areas, and property taxes are also high. However, if the primary consideration is the child's future education, one should try to buy properties near school districts.
As a leading institution for U.S. investment immigration, WorldWay provides professional and thoughtful services that permeate every small detail of the investor's immigration process to the United States. When clients first arrive in the U.S., the WorldWay Customer Service Center will provide comprehensive landing and settlement assistance services, including assisting in arranging airport pick-up for the first entry; assisting in bank account opening procedures; assisting in applying for a Social Security card; assisting in hotel reservations; assisting in booking flights to the U.S.; assisting in contacting driving schools and introducing driver's license test information; assisting in contacting moving services; assisting in contacting real estate agents, and assisting in handling rental or home purchase matters, etc. For details, please inquire: 400-138-2929.
