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Beyond the information and extensive reviews you’ll find on the site regarding projects and investment ventures, you’ll also benefit from guides published from time to time on various topics in the field, along with practical tools that can assist real estate investors.
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Real Estate Investment in the United States – A Guide for Investors
Real estate has always been a hot market. There’s constant demand for housing and commercial spaces—after all, people need a roof over their heads and places to do business. Whether it’s homes, offices, or stores, real estate is always in demand. In recent years, however, the Israeli market has become an unstable bubble with an uncertain future.
Property prices in Israel continue to skyrocket, and no one knows how high they’ll go. As a result, many Israelis are looking for alternative investment channels. One of the most attractive options today is the U.S. real estate market. After all, the United States is known as “the land of unlimited opportunities.”
Here, you’ll find relevant information about investing in U.S. real estate—a guide for both beginners and experienced investors to help you take the first steps toward achieving your investment goals.
Why the United States?
Anyone who has ever considered buying an apartment in Israel has likely encountered extremely high prices for properties in mediocre or poor condition. If they focused on central Israel, they probably found even worse deals at even higher prices.
But just a few thousand kilometers away, in the United States, a completely different picture emerges.
Prices for homes and even villas in the U.S. are shockingly low compared to Israel. One of the main reasons is the economic crash the U.S. housing market faced about a decade ago.
In addition to the 2008 crisis, there are two other key reasons U.S. property prices remain attractive:
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U.S. construction methods are cheaper and more efficient than those used in Israel.
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The pricing model for land is very different, which further reduces property costs.
The home buying process in the U.S. is also much more transparent than in Israel, giving investors better visibility and control.
If you’re interested in comparing hot investment zones, check out our overview of the central real estate projects in Israel.
So What Makes U.S. Real Estate Investment So Special? And How Is It Tied to the 2008 Crisis?
To understand the U.S. housing market, you need to look at the trends that have shaped it over the past decade. In 2008, the U.S. experienced a major internal economic crisis that rocked the local economy.
Leading up to the crisis, the U.S. government encouraged home buying by incentivizing banks to offer loans and mortgages to almost anyone no questions asked. This fueled a massive housing demand, and many people took out mortgages without much thought.
The housing market spiraled upward, with more and more people buying homes as investments. But many of these loans were high-risk, given out without proper guarantees and backed only by the property itself.
To fund these risky loans, banks issued high-interest mortgage-backed securities. With minimal oversight, many borrowers defaulted, and banks started foreclosing on homes.
But they quickly found themselves holding too many properties and not enough buyers. The market cooled, demand dropped, and prices plummeted due to an oversupply.
Some homeowners who could afford their mortgages simply walked away because their home was worth less than the mortgage they owed. The result was a massive collapse banks failed, and property prices tanked.
This was the beginning of the global 2008 financial crisis. But after the crash, savvy investors around the world saw potential in America’s newly cheap real estate and began buying.
At the same time, U.S. banks tightened mortgage requirements and even penalized borrowers who had previously defaulted. This financial squeeze on Americans became an opportunity for foreign investors: abundant properties, low prices, and high demand for rentals.
While the market has slowly recovered and prices have risen, they’re still low relative to many parts of the world—especially compared to Israel.
U.S. Real Estate Investment: Taxes and Potential Returns
Before diving into taxes and returns, let’s briefly cover how buying a property works in the U.S., since that affects your costs. Like in Israel, many deals are closed through real estate agents. But for foreign investors, that’s even more crucial since they usually can’t be physically present to inspect the property or manage it afterward.
Interestingly, many investors prefer to buy properties through a limited liability company (LLC) set up specifically for the purchase. Setting up an LLC is simple, takes only a few days, and doesn’t require U.S. citizenship or a green card. The LLC structure helps protect the investor’s personal assets and offers favorable tax treatment.
Taxes in the U.S. vary by state, but the system is fairly consistent. Setting up an LLC costs $350–$1,200. A mandatory property inspection by a local inspector costs around $300.
To complete the deal, you’ll need a title company, a neutral legal entity that checks the property’s financial and legal history. This service costs around $400. The title company also handles closing the deal, which could add a few hundred to a few thousand dollars depending on the deal size.
There’s also property tax, similar to Israel’s municipal tax (arnona), but in the U.S. it’s the owner, not the tenant, who pays it. Property tax varies by state and city.
Since you won’t be managing the property yourself, you’ll likely hire a property management company that takes 8–10% of the monthly rent—usually passed on to the tenant. You’ll also pay state and federal taxes on rental income, ranging from 10% to 35% annually.
It might sound complicated, but these are standard steps, and at the end of the process awaits your return on investment—your long-term profit. Returns come in two forms: rental income and profits from selling the property later.
While future returns can’t be predicted with precision, U.S. real estate has seen slow and steady appreciation in recent years. Plus, rental returns are easy to estimate—you know upfront what you’ll earn from rent in the coming year.
Compared to Israel, where real estate returns rarely exceed 6%, U.S. investments can offer 10% or more.
Bottom Line – Key Advantages of U.S. Real Estate Investment:
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Transparency – The entire process is open and regulated, making it easy to navigate.
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Low prices – U.S. homes are cheaper due to construction methods and land pricing, plus the long-term effects of the 2008 crash.
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High demand – Rental demand remains strong due to tight mortgage lending standards.
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Steady appreciation – U.S. real estate prices have risen moderately in recent years and are expected to continue climbing.
Where Should You Buy? How Do You Know Which U.S. State to Invest In?
Once you’ve reviewed all the information and decided U.S. real estate is right for you, the next step is choosing the right location. Several websites offer area comparisons, and working with a company that specializes in the U.S. market is also a great idea.
Here are the main factors to consider when picking a property:
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Expected monthly rent
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Local rental demand – Look for areas with future infrastructure projects, shopping centers, universities, or hospitals.
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Employment and socio-economic level – Avoid high-poverty neighborhoods with lower potential.
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Local taxes and real estate laws – These vary by state and city.
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Average local ROI – Know what kind of return properties in the area typically offer.
Now that you’ve read and explored the topic in depth, you’ve got a solid foundation on U.S. real estate investing. Still, to ensure you’re making the best decisions, we highly recommend reaching out to us for a consultation. Let’s make sure your investment journey starts on the right foot with peace of mind.
