In the USA, YOU HAVE THREE HOUSING OPTIONS:
- Rent an apartment or house.
- Acquisition of an apartment or house.
- Building your home.
Consider the advantages and disadvantages of each of these options.
1. Renting an apartment or house
Through this option are almost all visitors to the United States. The cost of rent depends on the number of bedrooms in the apartment (house) and its location. The difference can be very significant. For example: in Las Vegas, you can rent a very decent two-bedroom apartment in a good area for $ 1000 per month. In San Francisco , exactly the same apartment in about the same level of the area in less than 2300 will not be able to rent. So the cost of renting your apartment somewhere in the middle. For each additional bedroom, add approximately 25% to the rental price. If the apartment already has furniture, then add 10 – 15% extra.
But that’s not all. When renting an apartment, you usually conclude a contract for a year with the possibility of automatic renewal every year. But you must immediately pay for the first and last month of your stay, i.e. in two months. In addition, you must give your tenant a so-called security deposit . This is the amount that must be returned to you upon leaving the apartment. From this amount will be deducted the costs of cleaning the apartment after your departure, the windows you have broken, etc. The amount of this deposit is usually close to the cost of a monthly apartment rental. So, when entering the US, you should immediately know how much you will pay for renting an apartment, and have this amount on hand.
That is, if you decide to live in San Francisco, you need to have $ 6,900 to rent an apartment, in Las Vegas – $ 3,000, in Los Angeles $ 4,500. Utility payments will cost $ 200 – $ 250 per month. The phone is $ 30- $ 40 per month, not counting, of course, your international calls and the Internet. In addition, because you enter the apartment, where there is nothing but a kitchen (with all the equipment) and a bathroom. So you need a certain amount to get the necessary furniture (desk, bed) and household appliances (telephone, TV). All together it will be approximately $ 3,000 – $ 5.000 (this is the minimum). The disadvantages include the fact that the money you paid for the rent is lost for you forever.
Our company can rent you an apartment before your arrival or help you with a rental upon arrival in the USA.
2. Purchase of an apartment or house
Some of our clients ask them to buy a house or an apartment before they arrive in the United States. We do not recommend doing this, as almost always, those who purchased an apartment or house in advance, and not looking, are dissatisfied with the purchase. What you imagine and reality usually diverge. So we recommend that you purchase a house or apartment after arriving in the United States.
When purchasing a house or apartment, the bank representing financing is almost always at your service. But here comes your credit history and your income. If you do not have a credit history and cannot show your bank a stable source of income, the bank will not finance your house for more than 50% of its value. This means that you will have to put a very large amount as an initial payment.
Now in the US, the mortgage crisis. On the one hand, this is good, since you will be able to buy an apartment or house for less than the market value. But on the other hand, because of the harsh conditions for granting loans, as a foreigner, no one will give you a loan of more than 50% of the cost of an apartment and a high percentage (you have no credit history).
In terms of many years ahead, this will mean an overpayment by you of tens, or even hundreds of thousands of dollars. The problem is that the bank charges compound interest (interest on interest). For example, if you buy a house and take a loan of 6% per annum, then you will pay, for example, 15 years at $ 1,500 per month. With financing of the same amount, but at 12% per annum, you will pay the same $ 1500 per month, but not 15, but 30 years. So consider yourself.
Many may argue that in a year or two a house can be refinanced with the best interest. Yes, but under the laws of the United States, you must first pay interest on the loan, and then the value of the house. So for the first 2-3 years you pay not the value of the house, but the interest to the bank for the loan. Do not forget that when you design a house you have to pay a considerable amount (several thousand dollars) for registration, and the annual property tax is several thousand dollars in most states, and besides this, you need a minimum amount of $ 15,000 – $ 20,000 for home furnishings (which You will happily provide the same bank at the predatory interest).
So, if you do not have a significant amount that you can immediately pay when you buy a house, we do not recommend immediately buying a house. In our opinion, this makes sense a year or two after arriving in the United States, when you already have a certain credit history, and most importantly, a permanent source of income. In this case, you will have to deposit immediately no more than 10% of the value of the house, and the banks will fight for the right to finance you with a minimum percentage (5.5 – 6.0%).
One of the advantages of this option is that you have the right to write off the money that you paid as interest to the bank from your taxes. And since in the first years more than 90% of the funds you pay are interest to the bank, you save significant amounts.
We are not engaged in this business, but we can recommend you a number of serious companies with a wide choice of houses and apartments in various regions of the United States.
3. Building your home
We usually recommend this option to our customers. This does not mean that we recommend you to work hard on building your own house. In the American version, everything looks like this. This option has three main advantages compared with the option to purchase a finished house:
- You buy your dream home. You choose a house project. You can increase the size of the bedrooms, change the size and location of bathrooms, add built-in wardrobes, make a large children’s room on the first floor, etc. You choose which side your bedroom windows will face. Do you know how nice it is to admire the ocean while sitting on the balcony of your own home in California?
- You do not need to pay a large sum right away. But this option is available to you immediately upon arrival in the United States. When the house is built, the bank will know in advance that this house is being built for you, and you will have time to start a credit history at this bank and show the bank your permanent sources of income. That is, there is no question of high lending rates and large initial payments. In addition, in itself, the realization that you have built a home for your family and great-grandchildren in the USA is invaluable.
- The house you are building will cost you 15 – 20% cheaper than the house you are buying. That is, in terms of price-quality ratio, this option is undoubtedly the best.
How it happens in practice:
The first stage . Acquisition of land. You acquire land in the area you like. Pay the minimum payment.
The second stage . You choose a project that you like and make your own changes to it.
The third stage . A few months before the end of the construction of the house, you work with a designer and order your favorite interior design with all the equipment, wallpaper, curtains, furniture in all rooms, etc.
The fourth stage . Bring additional minimum payment (no more than 10%) and enter. At the same time, you find yourself in a house where you can immediately live, rather than start overhauling, breaking walls, thinking how it is a bunch of dissimilar objects that you brought from your apartment, arrange it so that it doesn’t look very terrible. Your wife will love this option. If you are a wife, we are sure that this option is exactly for you. There is one more nuance: for people who believe that life is possible only in the center of Manhattan (the skyscraper district of New York), alas, this option is practically not feasible.
Our company works with a number of companies in the United States who will build your dream home.