Investing in property in the United States offers significant opportunities for international investors. The U.S. real estate market is expected to grow at an annual rate of about 4.51% from 2024 to 2028, reaching a total value of $142.90 trillion by the end of 2028 (Statistia).

However, purchasing property in the U.S. involves navigating a complex landscape. This property management guide for foreign investors will help you understand the necessary legal structures, real estate laws, and strategies for managing a property investment business in the U.S., and how to protect your investment and reduce your tax liabilities.

How to Effectively Manage Properties Remotely

Managing properties from abroad requires building a reliable team, including property managers, a lawyer, and a CPA. The key roles you’ll need are a property manager, a lawyer, and a CPA.

Hire a Property Manager

A professional property manager handles rent, address maintenance issues, and tenant complaints. They also find new tenants and manage legal issues and paperwork. Working with experienced real estate professionals can ensure that your property is managed efficiently and in compliance with all relevant laws.

There are several property management companies in the U.S. Some popular options for residential portfolios include:

  • Greystar Real Estate Partners
  • Lincoln Property Co.
  • Cushman & Wakefield
  • Bozzuto
  • BH Cos

Some options for commercial portfolios are:

  • CBRE Group, Inc.
  • Colliers International
  • JLL
  • Newmark Knight Frank
  • Avison Young

Here’s a more in depth article on what a property management company does.

There’s also property management software. This software helps you keep track of payments, maintenance issues, and more, all from your computer or smartphone.

Here are some popular property management software options:

  • DoorLoop
  • AppFolio
  • TenantCloud
  • Hemlane
  • LandlordStudio

Build a Trusted Team

To successfully manage your property remotely, you need to build a reliable team. This team should include:

  • Skilled Lawyer
  • Property Manager
  • CPA that understand local and Federal laws that apply to your properties

When interviewing potential team members, inquire about their experience with similar cases or issues. Ensure they can explain complex matters clearly and that you can easily understand them. Effective communication is crucial, so choose someone who will keep you informed regularly.

Also, discuss their fees and preferred communication methods, including platforms, times or time zones, and frequency.

Can I Buy an Investment Property Through My Business

Yes, you can buy an investment property through your business. This method offers benefits like asset protection, tax advantages, and simplified management. Understanding the legal, financial, and regulatory aspects is essential to make the most of this approach.

Company Structuring

As a foreign investor in U.S. property, choosing the right entity to make the purchase is crucial. This decision helps protect your assets and can reduce your tax liabilities. The main options are:

  • Corporation
  • Limited Liability Company
  • Limited Partnership

Each structure offers unique advantages, so it’s important to select the one that aligns best with your investment goals and legal requirements. Additionally, foreign investors should be aware of the Foreign Investment in Real Property Tax Act (FIRPTA), which mandates withholding tax on foreign individuals selling U.S. property.


When you set up a corporation, the company technically owns the property. This means the company handles everything from designing and building to managing and maintaining the property. This structure can simplify taxes, loans, and future planning.

Corporations can own various types of properties, such as offices, stores, factories, and homes.

However, if the property is intended as a personal residence, buying through a corporation is not ideal due to the capital gains tax that applies when you sell.

Limited Liability Company

Starting a Limited Liability Company (LLC) allows you to move saved company earnings into this new entity to buy property. This structure helps separate the company's risks and potential legal complications from your property.

Setting up an LLC requires a one-time fee and ongoing annual costs for legal and accounting assistance. According to Forbes, the cost of forming an LLC can range from $150 to $4,000, depending on the state.

StateFiling FeesRecurring
Alabama$200 + $25 name reservation fee$10 annual report + $100 minimum for the Business Privilege Tax (yearly)
Alaska$250$100 (every two years)
Arkansas$50 paper / $45 online$150 (yearly)
California$70 + $20 Statement of Information$800 Annual Tax (yearly) + $20 Statement of Information (every two years)
Colorado$50$10 (yearly)
Connecticut$120$80 (yearly)
Delaware$110$300 (yearly)
Florida$100 + $25 registered agent fee$138.75 (yearly)
Georgia$110 paper / $100 online$60 paper / $50 online
Hawaii$50$15 (yearly)
Idaho$120 paper / $100 onlineNone
Illinois$150$75 (yearly)
Indiana$100 paper / $95 online$50 paper / $32 online (every two years)
Iowa$50$45 paper / $30 online (every two years)
Kansas$165 paper / $160 online$55 paper / $50 online (yearly)
Kentucky$40$15 (yearly)
Louisiana$100$30 (yearly)
Maine$175$85 (yearly)
Maryland$100$300 (yearly)
Massachusetts$500$500 (yearly)
Michigan$50$25 (yearly)
Minnesota$135 paper / $155 onlineNone
Missouri$105 paper / $50 onlineNone
Montana$35$20 (yearly)
Nebraska$110 paper / $100 online$30 paper / $25 online (every two years)
Nevada$75$150 annual report + $200 annual business license fee
New Hampshire$100 paper / $102 online$100 (yearly)
New Jersey$125$75 (yearly)
New Mexico$50None
New York$200$9 (every two years) + $25 for the IT-204 LL (yearly)
North Carolina$125$200 (yearly)
North Dakota$135$50 (yearly)
Oklahoma$100$25 (yearly) + $40 annual registered agent fee
Oregon$100$100 (yearly)
Pennsylvania$125$7 (yearly)
Rhode Island$150$50 (yearly) + $400 annual RI corporate tax
South Carolina$110None
South Dakota$165 paper / $150 online$65 paper / $50 online (yearly)
Tennessee$300$300 (yearly)
Utah$54$18 (yearly)
Vermont$125$35 (yearly)
Virginia$100$50 (yearly)
Washington$200$70 (yearly)
West Virginia$100$25 (yearly)
Wisconsin$170$25 (yearly)
Wyoming$100$60 (yearly)

Source: Forbes

Limited Partnership

In a Limited Partnership (LP), you need at least one general partner and one or more limited partners. The general partner is fully responsible for any debts, while the limited partners are only liable up to the amount they invested.

LPs must be officially registered in most U.S. states.

If you want to start your own business, the U.S. Small Business Administration (SBA) provides a list of all state and federal permits required.

Tax Implications

Navigating tax implications can be challenging for foreign investors conducting real estate transactions in the U.S. real estate market.

Here are the basic implications based on your business model.

Passive Investments

When you rent out a property, like a house where the tenant pays for everything — rent, taxes, repairs, mortgage interest, and insurance — that's considered a passive income activity (IRS).

The money you make from this kind of foreign investment is taxed at a flat rate of 30%, unless a tax treaty says otherwise. This tax is taken from the total rent you earn, not just the profit after expenses. You also need to report Forms 1042-S and 1042.

Form 1042 annual withholding tax return for U.S.
Form 1042-S

Selling Property and Conducting Business

When selling property as a foreign investor in the U.S., the first thing you need is a taxpayer identification number (ITIN), a 9-digit number starting with "9" used for tax filing purposes. To get a ITIN, complete this IRS Form W-7, IRS Application for Individual Taxpayer Identification Number. You will also be charged a capital gains tax.

Capital gains tax on the sale of property ranges from 15% to 30% of the sale price. Additionally, the buyer (also known as the transferee and withholding agent) must determine if the seller (transferor) is a foreign person. If the seller is foreign and the buyer fails to withhold taxes, the buyer may be liable for the tax. The seller must report the property sale Form 1040-NR or Form 1120-F.

For foreign investors involved in business activities in the U.S., rental income is taxed differently. This income is not subject to withholding upfront and is taxed like regular income, with higher earnings subject to higher tax rates.

Foreign investors can deduct expenses such as mortgage interest, property taxes, and maintenance costs from their income before taxes. To deduct these expenses, the investor must file specific tax forms, such as Form 1120- F, on time each year.

Income Taxes

As a foreigner owning property in the U.S., you are required to file yearly tax returns, similar to U.S. residents.

Nonresident individuals use Form 1040-NR, and foreign corporations use Form 1120-F. his process can be complex, so it is recommended to seek guidance from a professional CPA or attorney to ensure compliance and proper filing.

Investing in U.S. property as a foreign investor is both challenging and rewarding. Understanding legal structures and managing tax implications are crucial for achieving your goals.

But with the right team, the chances of success are high.

If you want to learn more about DoorLoop, and how our property management software easily manages any U.S. property, schedule a free demo today!

Frequently Asked Quesitons

Can foreigners buy rental property in the USA?

Yes, foreigners can buy rental property in the USA. There are no citizenship or residency requirements for real estate ownership in the United States. However, foreign investors must navigate certain legal and tax considerations and may need to set up specific business entities to manage their properties effectively.

Can foreign investors buy US real estate?

Yes, foreign investors can buy real estate in the USA. There are no restrictions on foreign ownership of real estate. However, investors must comply with U.S. laws and regulations, including tax and reporting requirements. Setting up the appropriate business entities and working with legal and financial advisors can help ensure a smooth investment process.

What percentage of homes are owned by foreign investors?

According to the Business Journal, foreign investors own a small percentage of homes in the U.S., typically between 2% and 3% of the total residential market. This equates to around 84,600 homes purchased by foreign buyers from April 2022 to March 2023, which accounted for approximately 2.3% of existing home sales during that period.

Where are foreigners buying homes in the USA?

Foreign investors tend to favor certain states for purchasing homes in the USA. The most popular states include: Arizona, California, Florida, New York and Texas. These states are popular due to their economic opportunities, and diverse real estate markets​.

Ilia is a Content Creator and Copywriter at DoorLoop with a background in Real Estate and Law. She graduated Magna Cum Laude from Florida International University with Bachelor's Degree in Political Science and International Relations.

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The information on this website is from public sources, for informational purposes only and not intended for legal or accounting advice. DoorLoop does not guarantee its accuracy and is not liable for any damages or inaccuracies.