How to make the most of investing in the US
Since the days of yore, Indians have had a rapacious appetite for land.
With the property sector is experiencing a slowdown in India, a growing number of Indians are looking to the West for stable investments in the United States real-estate market.
According to a report by the National Association of Realtors’ (NAR) 2017 Profile of International Activity in US Residential Real Estate, India emerged as the fifth-largest investor in US real-estate by purchasing property worth US$ 7.8 billion in the period between April 2016 and March 2017.
The depreciation of the rupee, poor returns from fixed deposits (FD), and government actions such as demonetisation provided incentives for the wealthy High Net-worth Individual (HNI) looking for a safe place to put away their extra savings.
Investors acquired properties to generate rental yield or for use by a child studying in the United States. There are a few ways for investors to get a piece of the realty pie.
One of them is to invest in a fund structured for global investors seeking opportunities in US real-estate. The other way to do this is to immigrate to the United States of America by participating in the EB-5 programme.
The former has the provision for wealth-building opportunities while the latter continues to be a top visa option for students seeking to pursue a degree in the United States of America or for the HNI family to relocate for either business or professional reasons.
Today, a majority of EB-5 offerings in India are leftover from the Chinese, where investors are known to ignore risk and return in favour of glitzy mega-offerings.
“A fund structured for a sophisticated Indian audience that appreciates the risk-avoidance of smaller and faster projects with an assured exit strategy and higher yields is what India needs,” said David Gunderson, founder and chief Information officer of US Freedom Capital, a US-based real-estate investment firm.
Several programmes like the FD + Green Card help Indians make the best of their investment in the US .
The advantage is that investors can have their cake and eat it too. The FD+ Green Card is a family-based US immigration programme, which pays 6-8% returns per annum, in US dollars and also gives green cards for the family.
This not only helps investors cover the cost of their child’s undergraduate education, but also leave the child with a sizeable amount to help them with life after college.