Your Property May Be in the U.S., but Your Buyer May Not Be: A Growing Number of Non-U.S. Parents Buying Real Estate Properties for Their Children in the U.S.
Canadian and Mexican citizens make up the most significant percentage of international buyers in the U.S. State-wise, 77% of Chinese buyers purchased a home in California at an average price of just over one million dollars. Money-wise, China and Canada have the highest and second-highest volume of real estate, at $6.1 billion and $5.5 billion, respectively. Next in line were India ($3.6 billion), Mexico ($2.9 billion) and Brazil ($1.6 billion) in the last couple of years.
It is not news that foreign real estate investors buy U.S. properties in large numbers, but little is known about who they really are. Our research findings suggest that on average, international activity in the purchase of real estate by foreign buyers were for students than any other group.
Like domestic real estate transactions, foreign transactions also place a large level of importance on their children’s education and so long as U.S. colleges and universities are perceived to be the best in the world, so too will there be a continuance of real estate investments from foreign buyers.
The number of international students attending U.S. universities and colleges has increased, and the purchase of real estate in close proximity of the universities and college towns where their children are attending, should not be a surprise.
Real estate investments generate a steady income stream, including appreciation in the value of their properties and rental income. Foreign investment in the U.S. education system is restricted, but it is still well-known that these purchases give children of foreign buyers the opportunity to work in the U.S., among other advantages.
Though most of the 80 million visitors to the U.S. each year have no interest in the home-buying process, a considerable amount of them still frequent enough to justify the cost and benefit from the tax savings. Owning a home allows you to lower your annual tax bill, as mortgage interest and other property taxes can be claimed on your tax return. More so, these tax deductions are a great way to offset education costs for parents of children studying abroad.
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