The buying process in the USA follows strict legislation. In order to clarify the procedures and explain some of the terminology, we have compiled a list of frequently asked questions and answers.
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The deposit, or bond, is the money paid by tenants at the signing of the tenancy agreement as security against potential damage to the property or its contents or against missed rental payments. This money is kept until the end of the tenancy and refunded if the property is left in an equivalent condition to the one in which it was first rented.Read more
As a landlord, you are responsible for making sure essential repairs are completed as soon as possible to ensure your tenants' safety and quality of living. It's therefore extremely important to consider the state of the property and to factor in the potential cost of maintenance before closing on the purchase.Read more
This is naturally a concern for any landlord, regardless of whether they live 5 minutes from their rental property or 5,000 miles away. Hiring a reputable property management company and taking out landlords insurance are your two main safeguards against damage to your home or its contents.
We cannot understate the importance of engaging a good property management company to oversee your rental investment in the USA. These people will be your right-hand men on the ground in the USA and will take care of the hundreds of small tasks and responsibilities involved in letting out and overseeing a property.Read more
The simple answer to this question is 'no'. A solicitor based in the UK is no more qualified to practise US law than an American lawyer is able to dip into the British legal system. The same applies to any nationality, regardless of whether you're Canadian or Cambodian.Read more
There are several types of insurance covers that you will need to have in place before renting out your property in the USA. The most important products you are likely to encounter are homeowners insurance and landlords insurance. There is sometimes confusion between these two insurance products, yet the distinction is quite straightforward. You are required to purchase homeowners insurance if you are living in the property and landlords insurance if you are renting it out to tenants.Read more
Working out your tax obligations as a landlord in the USA can be complex and will depend on the amount of income you receive as well as on your country of domicile. However, we will do our best to answer this as succinctly as possible. Your property management company or a good the USA accountant or tax attorney will be able to shed further light on your specific tax obligations.Read more
Title insurance is one of several insurance policies you are likely to find yourself taking out when you purchase an the USA property, and possibly the most important one. This type of cover is fairly common within US property transactions and provides protection against any issues that may threaten your legal ownership of the home.Read more
While a highly unlikely scenario, this can and does happen in the USA and indeed other cities around the world, so it's worth being aware of the risk. There are bound to be a few bad apples in any market and this further underlines the importance of vetting your property management company before entrusting your investment over to them.Read more
You may have heard the HUD-1 form mentioned in relation to buying a property in the USA and wondered whether you need one. In reality only a relatively small number of non-US investors obtain a mortgage from an American bank to buy their the USA property so you are unlikely to find yourself needing an HUD-1. Nevertheless, it's important to understand the financing options open to you as a prospective participant in the US real estate market and a full understanding of the HUD-1 statement is certainly worth having.Read more