At the recent 2017 U.S. Investment Summit, renowned entrepreneur Mr. Feng Lun shared his nearly 20 years of experience investing in the United States, earning high praise from the eight hundred guests in attendance.
Mr. Feng Lun pointed out that there are many ways for Chinese individuals to invest in the United States, including corporate mergers and acquisitions, real estate, and investment immigration. Among these, investing in real estate is a relatively common approach. Generally speaking, Chinese individuals buy property in the United States primarily for four reasons: children's education, vacation needs, asset allocation, and special purposes. Regardless of the motive, the United States remains a popular choice for high-net-worth individuals seeking overseas investment.
Overview of home buying costs in popular U.S. states for Chinese buyers:
1. Manhattan, Long Island (New York Area)
New York area one-time home buying costs:
1) Property price
2) Title insurance: approximately 0.4%
3) Transfer tax (state and county): approximately 1.8%
4) Attorney, registration, POA, etc.: 0.16%
5) Survey fees and other miscellaneous expenses: 0.1%
Daily expenses after purchase:
1) Property tax: 2-3%, varies by location
2) Management fees: $1–$2 per square foot
2. Washington (Washington D.C. Area)
Washington D.C. area one-time home buying costs:
1) Property price
2) Settlement fees charged by the title company: $700–$800
3) Title insurance fees: $4.75 per $1,000 for property values under $250,000; $4.05 per $1,000 for $250,000–$550,000; $3.45 per $1,000 for $500,000–$1,000,000; $3 per $1,000 for $1,000,000–$2,000,000
4) Government recording fees of $60 and land survey fees of $190.
5) One-time government transfer fees.
6) Property tax is paid annually; generally, half a year's worth is paid in advance at closing.
7) HOA transfer fee, usually a one-time payment of $50–$150. Several months are also paid in advance at closing.
Daily expenses after purchase:
1) Property tax: 0.883% of the assessed value. The government assesses the property annually; generally, the assessed value is lower than the market sale price. For investment in Montgomery County, the property tax rate is a strong selling point.
2) HOA fees. Varies by community, from as low as $50 per month to $300 per month in upscale communities.
3. Houston, Dallas (Texas)
Texas one-time home buying costs:
1. Escrow fee (Title company fee): $200
2. Copy/postage fees: $15
3. Government fee (Recording fee): $30
4. E-recording fee: $5
5. HOA Transfer fee: $250
Daily expenses after purchase:
1. Home insurance per year: $700–$1,000
2. Property tax: The government collects 2.5%–3.5% of the property value annually.
3. HOA (Homeowners Association fees): Houston consists of many cities, such as Katy, Sugar Land, etc. If the property is in the city of Houston, there is often no HOA, but others range from $300–$1,000. Communities with security guards can reach $1,000 or more.
4. Lawn mowing fees: Landscapers typically charge $30–$50 per mow. Mowing is needed every two weeks during the 7-month summer season; no maintenance is needed in winter. If you do it yourself, these costs are avoided.
5. Annual home maintenance: This depends on the age of the house. The figure can be $0, or around $500 or more, depending on how well the owner maintains the property. It is highly recommended to set aside about $500 annually.
4. Seattle (Washington State)
Washington state one-time home buying costs:
1) Property price: Calculated based on $1 million, assuming a cash transaction
2) Earnest money deposit when submitting an offer: 2–3% (this will be deducted from the final closing costs)
3) Professional home inspection fee: $400–$700 (depending on house size)
4) Closing costs: Approximately $1,000–$1,500
5) Property tax for the current year: Prorated between the buyer and seller based on the closing date.
Daily expenses after purchase:
1) Annual property tax: 1% of government assessed value (not necessarily the purchase price, but the government's market assessment at the time)
2) Annual home insurance: $800–$1,000, depending on house size, age, and price
3) Utilities (water, electricity, trash, gas): Approximately $200–$300 per month (depending on household usage); if renting out, the tenant usually pays.
4) Property management fees: Almost none for single-family homes, but if the community is newer, it may be tens of dollars per month. Most townhouses do not require property management fees.
5) Custodial/Management fees: If investing remotely, 8–10% of rent for management fees; repair or cleaning costs are extra.
5. West Palm Beach, Miami, Orlando (Florida)
Florida one-time home buying costs:
1) Settlement or closing fee (Title company service fee): Approximately $250. (Most title company closing costs, title insurance, title search, and other major fees are paid by the seller)
2) Property management fees for the current month or quarter (typically $200–$300 for community property)
3) If the current year's property tax has not been paid, the seller will provide the buyer with the portion of the year's fees prior to the purchase at closing, and the buyer will pay it at the end of the year. If it is the end of the year, the buyer pays the tax directly for the days from the closing date to the end of the year.
4) Government registration fee: Approximately $50
5) Government utility and miscellaneous fees: Approximately $100
Daily expenses after purchase:
1) Community property management fee: $200–$300/month, including lawn mowing, security services, community facilities, trash collection, etc.
2) Property tax: Property tax varies because the government's annual assessed value changes.
3) Home insurance: $600/year; if adding risk coverage: approximately $1,500/year. Homes built after 2000 have better structures, making insurance relatively cheaper. The newer the house, the cheaper the insurance.
6. Boston (Massachusetts)
Massachusetts one-time home buying costs:
1) Property price: Calculated based on $1 million
2) Attorney fee: $500
3) Title insurance: $4,000
4) Government registration fee: $400
5) Homestead: $100
Daily expenses after purchase:
1) Property tax (0.8%–1.8% of government assessed value; varies by city/town. Generally, good areas are more expensive; government assessment is usually 80% of the home price)
2) Property management fees (only for townhouses or condos, not single-family homes): $150–$2,000 per month.
In fact, there are many ways to invest in the United States, such as corporate acquisitions, mergers, real estate investment, funds, finance, etc. Among these, EB-5 investment immigration is an important way to invest in the U.S., which not only creates jobs for the U.S. but also allows investors to gain a U.S. Green Card for their entire family, while also serving as an important method for overseas investment allocation.
Especially with the increase in the immigrant population, it is becoming increasingly popular for immigrants to invest in U.S. real estate. After obtaining a U.S. Green Card, children can better enjoy U.S. education, and investors can leverage their status to better purchase property in the U.S., establish a second home overseas, expand overseas businesses, etc. Therefore, investment immigration is often a precursor to overseas real estate investment.
Currently, WorldWay has launched three high-quality, pre-approved EB-5 projects to help investors successfully obtain a U.S. Green Card before policy changes. WorldWay's customer service center in Los Angeles, California, can also provide you with a series of services including arrival in the U.S., settling down, assistance with renting or buying property, and overseas real estate investment. For inquiries, please call: 400-138-2929.
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