MUST READ: How Fed Interest Rate Decisions Impact Real Estate Investors

The Federal Reserve’s interest rate decisions play a significant role in the real estate market, impacting investors in different ways. This article explores two perspectives on how Fed interest rate decisions can affect foreign national investors and U.S. expat investors in the real estate market.

Point of View 1: The Fed Will Raise Interest Rates

“The Federal Reserve’s job is to do the right thing, to take the long-run interest of the economy to heart, and that sometimes means being unpopular. But we have to do the right thing.” – Ben Bernanke, Former Chairman of the Federal Reserve.

Impact on the Real Estate Market:

If the Fed raises interest rates, it becomes more expensive to borrow money. This will likely cool the housing market further, discouraging potential owner-occupied buyers with higher mortgage rates and potentially, in some markets, could lead to a decrease in property prices. Comparing interest rates to post-Covid, many view this as a “high-interest rate environment”; however, it’s essential to note that U.S. mortgage rates, even with recent increases, still remain historically low.

Investors who act now may benefit from several advantages:

1. Future Refinancing Potential: What goes up, must come down. If the Fed decides to reduce interest rates in future cycles, property owners can explore refinancing options for lower mortgage rates, reducing monthly payments, and releasing equity for other investments or property improvements.

2. Stable Mortgage Payments with 30-Year Fixed: Opting for a 30 or 40-year fixed-rate mortgage period provides stability and predictability in mortgage payments, even if the Fed raises rates. This not only provides investors with financial security but also grants them peace of mind, as they have a clear, unchanging monthly payment to budget for.

3. Affordability and Negotiation Power: The fear of further rate increases may lead some potential investors and many owner-occupied buyers to remain on the sidelines, assuming it’s a high-interest rate environment. In reality, if the property is purchased as a rental investment, interest rates are still favorable. Investors who act now not only secure fixed rates but maintain their affordability advantage. Moreover, they tend to be in a position of power to negotiate deals that did not exist when rates were low.

4. Everything is Cyclical: Again, what goes up, must come down. If you’re able to take advantage of the current buyer’s market and purchase a property with favourable terms now when interest rates go back down to 4-5%, the FOMO frenzy will happen again, and likely, property prices will appreciate quickly.

Will the Fed’s Interest Rate Hikes Make Rental Yields Unattainable?

As interest rates rise, it becomes tougher for homebuyers to afford their dream properties. This creates an ideal scenario for real estate investors as more individuals opt for renting. As the number of people unable to buy or choosing to wait grows, rental prices go up. This ongoing trend boosts rental yields, even in the face of higher interest rates. This highlights the importance of timing for potential real estate investors, especially foreign nationals and U.S. expats.

In summary, the current market landscape presents an opportune moment for investors to make strategic real estate purchases. By recognizing that interest rates, even if they rise, are still overall historically low, investors can secure stable mortgage payments, preserve negotiation power, and position themselves to capitalize on potential future interest rate reductions through refinancing. Now is the time to act and benefit from the unique advantages offered in today’s real estate market.

Point of View 2: The Fed Will Hold Steady or Start Decreasing Interest Rates

If the Federal Reserve keeps interest rates where they are or even lowers them, it could have some notable effects on the real estate market. Lower rates tend to make homes more affordable, which can attract more buyers and potentially push property prices higher. 

Impact on Housing Prices:

If the Fed maintains or decreases interest rates, it can stimulate housing prices. Lower rates enhance affordability, attracting more buyers and potentially driving property values higher.

Will People Sitting on the Sidelines Jump Back into the Market?

Lower interest rates can serve as a catalyst for individuals who have been patiently waiting on the sidelines. Reduced borrowing costs make homeownership more accessible, motivating potential buyers to enter the market. This surge in demand could create a favorable environment for those who have already invested in real estate.

Potential for Refinancing:

Date the Rate. Marry the Property. One strategic advantage of buying real estate now, especially when interest rates are low, is the possibility of future refinancing. If the Fed does indeed decrease interest rates in the future, investors can explore refinancing options to secure even lower mortgage rates. This not only reduces monthly payments but also allows investors to release equity for other investment opportunities or property improvements.

Impact on Foreign National Investors and U.S. Expat Investors:

Lower interest rates can make U.S. real estate investments more attractive to foreign national investors and U.S. expats. Reduced borrowing costs in U.S. dollars can create financial advantages for entering the American real estate market.

In conclusion, acting now in the real estate market while interest rates remain favorable presents a dual opportunity: the potential for immediate returns through rental yields and the prospect of future refinancing benefits should the Fed decide to reduce interest rates further.

At America Mortgages, we know the Fed’s interest rate decisions can be uncertain for foreign national and U.S. expat investors. We’re here to help. Our experienced loan officers can clarify how these decisions impact your investments. Don’t wait – secure the ideal mortgage for your needs and unleash your real estate investment potential.

Contact us today to get started on achieving your investment goals. [email protected]

Top 10 U.S. Cities to Buy a Home for Under $250,000 [2023]

In the ever-changing U.S. real estate scene, recent years have seen significant shifts. Millennials are redefining their living preferences, moving from bustling cities to peaceful suburbs, and vacation properties are capturing investors’ attention. Throughout this journey, property prices have experienced remarkable changes. Whether you’re a first-time homebuyer, an experienced investor, or even a U.S. expat or foreign national, the city you choose for your investment can greatly impact potential appreciation and rental income

Real estate investment is a strategic move that can provide reliable rental income while potentially increasing your overall wealth through property appreciation. For many, it’s a cornerstone of their path to financial success. Here’s the list of 10 U.S. cities where buying a home for under $250,000 promises both affordability and the potential for solid returns on investment.


Median Purchase Price: $240,000

Average Rental Income: $1,700

Maine is a beautiful state with a low cost of living and a variety of outdoor activities, making it a great place to invest in a rental property. In addition to its affordability and strong rental market, Maine also has a growing population. This is due in part to the state’s strong job market and high quality of life. As the population continues to grow, so too will the demand for housing. This makes Maine an ideal place to invest in a rental property for the long term.


Median Purchase Price: $245,000

Average Rental Income: $1,800

Vermont is a charming state with a low cost of living and a variety of outdoor activities, making it a prime spot for rental property investment. Vermont not only offers affordability and a robust rental market but also boasts a stable economy, a high quality of life, Fortune 500 companies, a low unemployment rate, breathtaking scenery, and vibrant cultural attractions.

New Hampshire

Median Purchase Price: $250,000

Average Rental Income: $1,900

New Hampshire, a scenic state with an affordable lifestyle and abundant outdoor recreation options, presents an ideal landscape for rental property investment. With a strong job market, a high quality of life, low unemployment, captivating scenery, and rich cultural offerings, New Hampshire offers a well-rounded living experience and promising investment opportunities.


Median Purchase Price: $255,000

Average Rental Income: $2,000

Investing in Massachusetts real estate presents several compelling benefits. The state’s strong and diverse economy, driven by sectors like technology, healthcare, and education, creates a stable and lucrative real estate market. The presence of renowned universities like Harvard and MIT attracts a consistent flow of potential tenants and buyers, bolstering demand.

Rhode Island

Median Purchase Price: $260,000

Average Rental Income: $2,100

Rhode Island’s real estate scene offers several attractive benefits. The state’s stable economy, driven by various industries, provides a secure and potentially profitable investment opportunity. Additionally, Rhode Island’s vibrant culture and the presence of respected institutions like Brown University continually attract potential tenants and buyers, maintaining a robust demand for real estate properties.


Median Purchase Price: $265,000

Average Rental Income: $2,200

Connecticut’s real estate market offers numerous advantages. The state’s strong economy, diverse job opportunities, and proximity to major cities like New York make it an appealing destination for real estate investment. With its charming towns, excellent schools, and picturesque landscapes, Connecticut attracts both renters and homebuyers, ensuring steady demand in the housing market.


Median Purchase Price: $275,000

Average Rental Income: $2,400

Investing in Pennsylvania’s real estate market presents various benefits. The state’s diverse economy, affordable living costs, and rich history make it an attractive destination for property investors. With major corporate headquarters and esteemed universities like the University of Pennsylvania, Carnegie Mellon University, and Penn State University, Pennsylvania is a hub of education and business, appealing to a broad spectrum of tenants and buyers.


Median Purchase Price: $280,000

Average Rental Income: $2,500

Maryland’s real estate market is a promising investment choice. The state’s strong job market, diverse population, and proximity to major metropolitan areas like Washington, D.C., create a favorable environment for real estate investors. Furthermore, the presence of major corporations and prestigious institutions like Johns Hopkins University and the University of Maryland enhances its appeal, particularly for residential real estate ventures.


Median Purchase Price: $285,000

Average Rental Income: $2,600

Delaware’s favorable tax environment, proximity to major cities like Philadelphia, and a diverse economy make it an attractive destination for property investors. With a range of housing options, from suburban neighborhoods to coastal communities, Delaware appeals to a broad spectrum of tenants and buyers, ensuring a steady demand in the real estate market.


Median Purchase Price: $205, 000

Average Rental Income: $1,600

Mississippi’s real estate market offers promising investment potential. The state’s low cost of living, affordable housing, and a variety of outdoor recreational activities make it an appealing destination for real estate investors. With prominent businesses and esteemed institutions like Mississippi State University, makes it a promising market for property investment.

Whether you’re an aspiring real estate investor or a first-time homebuyer in the U.S., America Mortgages is here to support your journey. If you’re eyeing a home in one of these cities, rest assured that even if you’re a non-U.S. citizen, you can qualify for up to 75% financing in all 50 states without needing a U.S. credit history. For U.S. expats, we’ve got you covered with up to 80% loan-to-value.

Every loan program we offer is tailor-made to our clients unique needs. With our deep understanding of the landscape, clientele, and processes, we stand as your trusted partner. Curious to learn more? Don’t hesitate to schedule a no-obligation call with one of our experienced loan specialists today.

Reach out to us at [email protected] to embark on your real estate journey with confidence.

What a 4% Interest Rate Could Mean for the U.S. Real Estate Market in 2024

U.S. Real Estate Market

The U.S. real estate market has been thriving over the past several years. Even with increased borrowing rates, the lack of U.S. property inventory has kept property prices stable and, in many markets, expected to appreciate beyond market expectations. 

Now, picture this: What if you purchased today at higher interest rates where owner-occupied buyers are sitting on the sidelines? Sure, your cost of borrowing would be higher; however, the likelihood of buying a property for more favorable terms and price is certainly higher. Now imagine what will happen to that property if interest rates were to drop to 4% next year. 

Let the frenzy begin (again)! 

Sophisticated real estate investors and funds jump at the opportunity to buy when others are not. This is when great deals are available, and competition for these properties is low. Sophisticated investors avoid getting caught in the FOMO frenzy when rates are low, and everyone is buying. They buy now and then simply wait to refinance to a lower rate when it makes sense. Marry the property. Date the rate.

Here’s the thrilling part for foreign national and U.S. expat investors who are contemplating a purchase in 2023. America Mortgages has loan programs such as 40-year fixed terms or 10-year fixed interest-only programs, which offset the current higher rates, making payments more affordable. 

Shifts in Property Prices

If interest rates were to fall to 4%, one immediate consequence would likely be an upswing in property prices. Lower interest rates make borrowing more affordable, creating a larger pool of potential homebuyers including those looking to buy a home to live in (owner-occupied) and real estate investors. This heightened demand typically drives home prices up. However, the extent of this price increase would still depend on factors like the overall health of the economy and the housing supply.

Homeownership Trends and Refinancing

Indeed, things are changing in how people see owning a home. James Healy, a real estate expert, says Millennials are playing a big role in this shift. He explains, “The American dream of owning a home is still there, but now millennials are the ones taking the lead. They see real estate as an investment, even if they live there, and they might not feel as emotionally attached as in the past.”

Furthermore, homeowners are now embracing the concept of shorter-term investments, with an increasing number contemplating stays of just 2 to 3 years in their properties. This shift in mindset opens opportunities for refinancing. In situations like this, refinancing within a year to get interest rates under 4% starts to look really appealing, making it easier to achieve the dream of owning a home.   

2024 Mortgage Rate Forecast

As per MBA’s projections, the average interest rate for a 30-year fixed mortgage is estimated to drop significantly by late 2024. If you are looking to buy a home now, it’s just a matter of waiting for interest rates to become more favorable. If rates go in the opposite direction, you have the comfort of knowing you’re in a long-term fixed-term loan regardless of the age of the borrower, Something very unique to global real estate investors. 

Why Act Now?

  • Long-Term Appreciation: Property values are projected to continue appreciating over time. Although they might not grow in price as quickly, a recovering economy, low unemployment rates, and limited housing supply collectively support the enduring appreciation of property values.
  • Resourceful Lenders: At America Mortgages, we specialize in helping foreign national and U.S. expat investors navigate the U.S. property market. We offer a range of customized programs designed to simplify the loan qualification process.

In conclusion, while lower interest rates might seem important for the U.S. real estate market, there’s more to think about. Investors should consider how sophisticated real estate investors and funds look at property investing in a “down” market. They look at how property values could grow over time and creative financing options that can maximize yield. They also focus on the “now” while strategically planning for “tomorrow.” 

Whether you’re a foreign national, a U.S. expat, or a seasoned investor, America Mortgages’ specialized lending programs are designed to make your homeownership dreams a reality. With our expertise and dedication to your success, we ensure that you not only secure favorable terms but also embark on a journey of financial growth and prosperity. Trust America Mortgages to be your partner in achieving your real estate goals. Your future in U.S. real estate begins with us. [email protected]

Marry the Property. Date the Rate. Good Investing? We think so, and here is why… 

Home Price Comparison

Everyone is aware mortgage interest rates have been rising since early last year. The average interest rate on a 30-year mortgage is now almost 7%.

Those rates have undoubtedly made buying a home more expensive. In fact, according to the Mortgage Bankers Association, the median mortgage payment is now $2,162 — up 14% from a year ago, making it difficult for many homebuyers to afford; hence, they are forced to rent, creating a perfect storm for rental property owners

Sophisticated investors rejoice as it is now a BUYER’S MARKET. If you take the popular “marry the property, date the rate” approach, experts say those higher rates might not seem all that bad.

What exactly does this approach entail, though? Here’s what you need to know.

What does “marry the property, date the rate” mean?

“Marry the property, date the rate” is a popular saying these days, thanks to higher interest rates. Essentially, the idea is that when you buy a house in today’s market, you focus on finding the perfect investment property or second home — a home you love and want to tie yourself to for the long term (like a marriage). 

But your rate? That’s something you approach as only temporary — someone you’d date but never really commit to. 

“This strategy suggests that you should prioritise finding the right property that checks all the boxes for your long-term needs and preferences rather than getting overly fixated on the current interest rates,” says Nick Worthing, America Mortgages’ Vice President of U.S. Lending. “In other words, focus on the specifics of the property itself, as it’s a long-term investment, while considering interest rates as a variable that can change over time.” He further states, “Sophisticated investors jump into the market when they are in the driver’s seat and can negotiate great deals. The novice investor jumps into the market when everyone else does. It doesn’t mean one investment strategy is right and the other is wrong; it simply means an – opportunity.”

The key component of the “marry the property, date the rate” approach is refinancing and potentially taking advantage of increasing property values once rates decrease again (and if history repeats itself, they will). If you choose this strategy, you’d take today’s interest rates as a necessary evil and then plan a refinance down the road — once rates fall and you’re done “dating” that initial rate. 

When is it smart to “marry the property, date the rate”?

Taking the “marry the property, date the rate” approach can be a smart strategy as long as you follow two simple rules: First, make sure your mortgage payment is one you can comfortably afford for the foreseeable future and the rental amount is sufficient to cover all or most of that amount. There’s always the chance that rates won’t drop soon, so make sure you aren’t overextending yourself. “If you find the right property at a good price, then it is always the right time to buy with a long-term hold philosophy. In a Buyer’s Market, when the owner-occupied buyer is sitting on the side-lines, the investor has the upper hand to get into a property deal at terms that haven’t been seen for the past few years. 

Second, the seller will be willing to “make a deal,” and you need to get the property at a good price. This will not only help offset the cost of those higher rates, but it’s also the one variable you can’t go back on. The strategy here; you have the option to renegotiate your mortgage rate if rates fall, but you can’t renegotiate the purchase price.

When shouldn’t you “marry the house, date the rate”?

Dating the rate isn’t a good idea if you’re in a particularly hot housing market. This likely means you’ll pay an inflated price for your home and compete against people buying their “dream home” to live in. This is not an investors’ market unless you’re looking for a quick flip. If you don’t plan to hold the property for a while, this strategy may not work for you. While refinancing can help you take advantage of lower rates later on, it does come with costs. When interest rates decrease, America Mortgages can easily give you a breakdown to see if/when refinancing makes sense.

Other ways to deal with higher mortgage rates

Rolling over for today’s high mortgage rates isn’t your only option if you want to buy a home in today’s market. For one, you can explore alternative mortgage products that America Mortgages offers. While rates on 30-year loans might be near 7%, there are numerous ways to offset the rate with creative loan programs. 

  • Interest Only – service the interest at a fixed rate for 10 years. You will not be paying down the principal, but for savvy investors, this is an excellent way to maintain a positive yield.
  • 40-year mortgage loans – yes, you read that correctly. America Mortgages now has fixed rate 40-year tenure. This is an excellent way to fix your rate over the long haul. You know exactly what that payment will be for the next 40 years; as rental prices increase, your payment will stay the same. Even if you don’t refinance, this is a fantastic way to see passive income with a long-term hold strategy. 

The monthly payment for a amortization 30-year fixed mortgage (P/I) with a loan amount of $250,000 at an interest rate of 5.00% is $1,380. The monthly payment for a 40-year fixed, 10 year interest-only mortgage with the same loan amount of $250,000 at an interest rate of 7.5% is only $1,526. This is an increase of $146, a 10.5% increase.

When compared to the rising cost of rent, the increase in monthly mortgage payments is relatively minimal. The average rent for a two-bedroom apartment in a major U.S. city has increased by more than 40% in the past two years. This means creative financing even in a higher interest rate environment can actual improve rental yield overall.

Top 10 Markets for Rent Increases

Will mortgage rates go down soon?

There’s no way to tell for sure if mortgage rates will drop, but if history repeats itself, expect rates to be lower within the next 12 to 24 months. Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association (MBA) agree, too. MBA predicts the average rate on 30-year mortgages will fall below 5% (owner occupied) by the end of 2024, while Fannie Mae’s projection is a 5.9% average. NAR predicts a slightly higher 6% rate.

It all will depend on inflation and the Fed’s actions in response to it. If inflation stays high and the Fed continues to increase its benchmark rate, mortgage rates could increase even further. If inflation cools and the Fed stops its rate hikes or reduces its rate altogether, mortgage rates could fall. We expect the latter, especially going into the next Presidential election. 

The bottom line

For now, mortgage rates are still higher than they were, but still historically low over a 20-year period.

Mortgage Rates

While the “marry the property, date the rate” approach will work for some investors, it’s not the right move for everyone. Always talk to your America Mortgages professional or financial advisor if you’re unsure what is best for your finances. If you do opt for the “date the rate” strategy, make sure you view it with a long-term hold (5 years+). Though refinancing may be an option later on, there’s no guarantee rates will drop while you own the property. 

Trust the experts

Unlike most banks and brokers that see one International Investor looking to obtain a mortgage a year, 100% of our clients are International Investors. Trust the experts in this industry to understand the complexities of Foreign National or U.S. Expat clients. For some, this is a rarity. For us, this is all we do! If you’d like information on loan programs or to schedule a call with one of our mortgage professionals, please use this convenient 24/7 calendar link.

How to Invest In Real Estate Amid High Interest Rates and Inflation

Invest In Real Estate

Investing in real estate when interest rates are rising can be a challenging decision. But if you know what you are doing, there is a world of opportunity.

When interest rates rise, finding profitable real estate deals may be difficult. What might be a fantastic deal when mortgage rates are low could potentially lose you money when mortgage rates are high. In times of high interest rates, people tend to panic, and novice investors or owner-occupied borrowers think the best idea is to wait it out and start investing when central banks pivot again.

But this approach means they miss out on some amazing deals and delay their investment goals. For those beginning their investment journey, it could mean never actually getting started. Are you aware that currently, 84% of Californians may be forced rent because it has become “unaffordable”? For sophisticated real estate investors, this means an opportunity to obtain the highest rent while also having the power to negotiate the purchase price of real estate. A perfect storm for savvy investors! 

The key is to know how to invest in real estate in a high interest rate environment. This allows you to make the most of the situation and come out stronger. For those who know what they are doing, these times are great for finding amazing deals. If you know what you’re doing, these times can greatly increase your net worth. 

There is a reason why this statement holds true through time: 

“Money can be made in bull markets. Fortunes are made in bear markets.”

Use Interest Rates in Your Negotiations

When buying an investment property in America, many may be concerned about whether the deal will be profitable when interest rates are on the rise. There will also be worry about where interest rates could be in the future.

This may seem like a bad position to be in. But guess who else will share these worries? The seller and the realtor selling the property. Both the seller and realtor will be aware that fewer people can afford to buy their property. They’re also aware that if they don’t sell the property fast, interest rates could rise again.

In this current market, the experienced real estate investor will ensure interest rates are part of the conversation when negotiating. If one does this correctly, one could get an excellent deal with the right seller. This is particularly true if the property has been on the market for a while and the seller is motivated. If a seller waits too long when buyers are skittish, they may be waiting a very long time to sell the property. Use this market pressure to your advantage!

Getting a great deal is particularly important in these circumstances, as buying a property below market value will give you some leeway in volatile market conditions. It also puts you in a fantastic position when interest rates go back down, and property values rocket up. 

Fixed-Rate Mortgages

Unique to the U.S. and one of the most valuable tools rental property investors have in the U.S. is the 30-year fixed-rate mortgage. Surprisingly, this style of mortgage is very much an outlier compared to what’s typically offered in other countries. Most countries tend to offer adjustable, variable, flexible, or renegotiable rate mortgages, all of which pose an inherent risk with the potential of an unexpected interest rate hike during the ownership of the property.

Rent Increases

As pointed out, a rental property’s projected cash flow is based on today’s rents, not tomorrow’s. Rents increase for two reasons: appreciation and inflation. 

Guess what doesn’t increase over time and is not affected by appreciation or inflation? Your mortgage payment when you have a fixed-rate mortgage! 

This means your cash flow spread will continue to grow over the life of your rental property as you continue to increase rents.

Your expenses, such as property tax and insurance, may increase over time, but they’re unlikely to increase at a rate anywhere near what rents will increase. Overall, you’ll see that rents will continue to pull farther and farther away from your fixed-rate mortgage expense, and your profits should continue to grow exponentially.

How a Rental Property Makes Money 

Before learning about U.S. real estate investing, you may have known that rental properties in America can be much more profitable than you think with the right tools and partners. 

The five ways that rental properties can make money are:

  1. Cash flow
  2. Appreciation
  3. Tax benefits
  4. Equity built via mortgage paydown
  5. Hedging against inflation

When you understand the details of each profit centre, you will not only become savvier about the power of holding a rental property long-term instead of short-term, but you’ll also begin to realise that the expense of an interest rate that’s a couple of points higher than what you’re used to likely doesn’t hold a candle to the profit potential over the lifetime of the rental property. 

You may already be saying, “But those other profit centres are speculative, and cash flow is still important, and the higher mortgage expense increases my risk by lowering my cash flow.” However, when dealing with this situation, your approach should focus on two essential factors:

Learn how to manage your various sources of income. If your available funds decrease due to a higher interest rate, explore other ways to make money. For instance, if you’re purchasing property in an area that’s improving and in high demand, you might expect its value to increase. Alternatively, if you’re investing when prices are rising a lot, how could you adapt? Visualise this like a chart with different bars representing each way you make money. If one bar goes down, are any of the other bars going up? If they’re all going down, that’s a concern.

When some bars are higher than usual, do those help to balance them out? It all depends on your specific situation.

Put a big focus on location and demand. Just like in the earlier example, a crucial factor is buying properties that can contribute to the “appreciation” part of your earnings, along with inflation and rental demand. When people really desire the properties they own, the chance for higher profits from these profit centres increases, and these profits will continue to grow consistently over time.

When you understand how rental properties make money, you can begin to wear the investor hat rather than the consumer hat. It’s the consumer mindset that often leads people to view increased interest rates as deal-breakers. However, those who genuinely understand how rental properties make money not only learn to look beyond the interest rates but also gain insights into how to compensate for it.

Find Cash-Flow Strategies

The traditional buy-to-let approach, while profitable when interest rates are low, might not be effective when rates are higher. Deals that used to bring in good cash flow with a low-rate interest-only mortgage could turn into situations where you break even or even lose money when rates are up. This means that traditional landlords and property investors miss out on many opportunities. This is where creative, informed, and forward-looking investors thrive. If you think outside the box, you gain a clear advantage in this kind of market.

An example of this is serviced accommodation. A property that might have generated low cash flow single-family buy-to-let can turn into a profitable short-stay let business. Renting it out on platforms like Airbnb can earn you much more than renting it out for the long term.

There is a broad range of clients for serviced accommodation, and it isn’t just holidaymakers. You don’t necessarily need to be in a vacation location as short-stay lets are used by everyone from contractors to re-locators. Simply find a location reasonably close to a chain hotel and check that the hotel is regularly fully booked.

Think Long Term

Property prices are volatile when interest rates are high. You should not be thinking about the cost of the property in short to medium term. If you have bought a high cash-flowing property, you should consider it a long-term hold. Don’t become overly concerned with month-to-month or even year-to-year price movements.

While past performance doesn’t guarantee future outcomes, real estate has historically been a reliable long-term investment. The global population continues to grow, and right now, there’s a shortage of at least 6.5 million properties in the U.S. Remember that in certain regions and cities, available housing space, especially in desirable areas, is limited. If you’re patient and able to wait out market fluctuations, there’s a strong chance you’ll reap significant rewards.

In conclusion, a high-interest rate environment can be a great time to buy an investment property, provided you’re well-informed. While the market might discourage other investors and property owners, you have the chance to uncover valuable opportunities. This means being creative, having the necessary experience, or having the willingness to gain the necessary knowledge to succeed in such a situation.

There is a world of opportunity for those willing to put in the time to learn and understand how to invest in real estate in times of rising rates. Many new millionaires and billionaires will be made in these times; it is up to you whether you will be one of them!

As a company America Mortgages has one focus, providing market rate mortgage financing for Foreign Nationals and U.S. Expats. This is all we do.

This is our expertise and no one does it better.

If you’re a sophisticated investor you will understand why working with experts in their field is so important. If you’re new to the U.S. real estate investor market, we welcome you to give America Mortgages the opportunity to work with you hand in hand to build your real estate portfolio in America. Getting approved for a mortgage is the first step. To arrange a convenient time to speak with a U.S. Mortgage Specialists in your time zone, please use this convenient calendar link.

Three Wishes in Real Estate

U.S. Real Estate

1. Wish I Could Time the U.S. Real Estate Market

“The market can stay irrational longer than you can stay solvent. That’s why it’s important to have a long-term investment horizon when you’re investing in real estate. Don’t try to time the market. Just focus on finding good deals and investing in properties that you believe in.” – John Maynard Keynes, Economist

The U.S. real estate market is an ever-changing landscape, but there has been far more success stories than not. However, understanding the factors that affect the market, such as interest rates, can increase your chances of making a wise investment in a timely manner.

For example, when interest rates are high, it’s an excellent time to buy since the marginal buyer can not afford the mortgage at current levels. This creates less demand and gives you pricing power over sellers to negotiate a better purchase price.

Conversely, when interest rates are low, it’s a great time to sell, as financing becomes more affordable and potential buyers emerge, creating more demand and giving more pricing power to sellers to negotiate higher selling prices.

Most sophisticated investors jump into this type of market immediately as property values will remain stable, and the opportunity to get not just a good deal but a great deal is much more possible. Remember, “Date the rate. Marry the property.” Interest rates will go up, and interest rates will go down. The unique aspect of U.S. real estate investing is that the U.S. allows you to fix an interest rate for 30 years regardless of the borrower’s age. If rates go down, refinance to a lower rate. If rates keep increasing, then you have the confidence of knowing that your mortgage payment is fixed. However, the likelihood of rental rates increasing is almost certain.

If you think interest rates are high, here’s a look at historical interest rates in the U.S.:

30-Year Fixed Rate Mortgage In U.S.

As you can see, interest rates have been trending downward for many years. This is good news for potential buyers because it means that monthly mortgage payments will be lower.

Bottom Line: The time you spend in the market is more important than timing the market.

2. I Wish Interest Rates Were Lower

Even though interest rates are higher now than they were a few years ago, they are still historically low. In fact, the average interest rate on a 30-year fixed-rate mortgage is currently around 7.50%. This is still much lower than the average interest rate of 14.6% in 1980.  

So, why do investors still invest in U.S. real estate when interest rates are high? There are a few reasons:  

Real estate is a tangible asset – Unlike stocks or bonds, real estate is a physical asset that you can touch and see. This makes it a more attractive investment for some people.

Real estate is a long-term investment – If you buy and hold onto a property long-term, you’ll likely see your investment appreciate in value.

Real estate can generate income – If you rent out your property, you can generate income to help offset your mortgage payments. With 30-year fixed rates (regardless of age), investors have the confidence of knowing their expenses are fixed, while rental rates increase over time.

3. I Wish Property Values Doubled Every Year

It would be great if property values doubled yearly, but unfortunately, that’s unrealistic. However, in some areas, property values appreciate more quickly than in others. For example, in hot real estate markets like San Francisco and New York City, property values can double in as little as 10 years.

Hot Real Estate Markets

In stable, consistent real estate markets such as the U.S., property values generally appreciate at an average rate of 3%-5% per year. However, several factors can affect the rate of property appreciation, such as the overall health of the economy, the supply and demand for housing in a particular area, and interest rates.

We at America Mortgages are here to help foreign nationals and U.S. expat investors navigate the intricacies of U.S. real estate investing. Our expertise and tailored mortgage options can help you achieve your investment goals and make the most of the opportunities in the market.

Our team of experienced loan officers is well-versed in working with foreign national and expat clients. We can help you navigate the complexities of U.S. mortgage options, ensuring that you have access to the most suitable financing solutions for your specific circumstances. Whether you’re looking to diversify your investment portfolio, purchase a home, or establish a foothold in the U.S. real estate market, America Mortgages is your trusted partner.

Contact us today at [email protected] to explore how we can assist you in achieving your U.S. real estate investment dreams. With our expertise and personalised approach, we are here to help you seize the opportunities and build a successful real estate portfolio in the U.S.

Want to Own a Tech Company? Get a 30-Year Mortgage

Investment Property - Fixed Rate Mortgage

In the tech world, you will hear terms like “platform” and why they are so valued by investors. These are the Amazons and Facebooks of the world and it’s because once they cover their fixed costs, as their revenue grows, so does their profitability. It’s also called operating leverage.

In a way, so is owning an investment property with a 30-year fixed-rate mortgage. Your fixed costs are flat for 30 years (and if rates fall, you can refinance to a lower rate), but rental income and property values increase over time.

Rental prices, in particular, have been rising considerably, especially during the last 12 months, despite a rise in interest rates given the lack of property supply and also the marginal buyer who cannot own at 7% mortgage rates is forced to rent.

In a perverse way, the rate increases have made it a better environment to own an investment property, especially in states like Texas and Florida, where families prefer to migrate to, given low state taxes and affordable cost of living.

Here is a visual to explain this important point:

Monthly Rental & Mortgage Payment

Amy, a savvy homebuyer living in Hong Kong, purchased her dream investment home in Los Angeles back in 2010. Recognising the benefits of a 30-year fixed-rate mortgage, she secured a loan at an interest rate of 5.25%. This meant that her monthly mortgage payment would be approximately $2,185.

  • Home price in 2010: $500,000
  • Rental price in 2010: $2,300/month
  • Monthly mortgage payment in 2010: $2,185/month
  • Home price in 2023: $2,000,000
  • Rental price in 2023: $4,500/month
  • Monthly mortgage payment in 2023: $2,185/month

As you can see, Amy’s monthly mortgage payments have remained the same over the years, while rental prices have steadily increased. This has resulted in a significant financial advantage for Amy.

Only in the U.S.!

The United States is the only country in the world that offers homeowners a 30-year fixed-rate mortgage, which provides stability and predictability. This means that your monthly mortgage payments will remain the same for the entire loan term, even if interest rates fluctuate. This can be a huge advantage, as it gives you peace of mind and financial security. When interest rates do go down in the future, you can refinance your mortgage and take advantage of the lower rate. This could save you a significant amount of money over the life of your loan.

What are 30-Year Fixed Interest Rates?

A 30-year fixed interest rate is a mortgage loan with an interest rate that remains constant throughout the loan’s entire term, typically three decades. This stability and predictability make it an attractive option for many homebuyers.

Advantages of 30-Year Fixed Rates:

  • Predictable Payments: Homebuyers benefit from knowing their mortgage payments will remain consistent over the long term. This predictability allows for better financial planning and budgeting.
  • Long-Term Stability: A 30-year fixed-rate mortgage offers homeowners extended stability. In uncertain economic times, this type of mortgage shields borrowers from sudden fluctuations in interest rates.
  • Protection from Market Volatility: Homebuyers can take advantage of historically low-interest rates when they lock in their mortgage for 30 years, safeguarding themselves from potential future rate hikes.

Key Takeaways

  • Foreign nationals can purchase homes in the United States, but they may face additional challenges, such as obtaining a mortgage.
  • A 30-year fixed-rate mortgage can provide stability and predictability for foreign nationals who are buying homes in the United States.
  • The cost of renting can increase over time, while the cost of a mortgage payment can remain the same.

Amy’s case study shows that a 30-year fixed-rate mortgage can be a wise financial decision for foreign nationals who are buying homes in the United States. By locking in a fixed interest rate, Amy was able to protect herself from market volatility and ensure that her monthly mortgage payments would remain the same for 30 years. This gave her peace of mind and financial security, even as rental prices in her area increased.

America Mortgage is a leading mortgage lender that specialises in working with foreign nationals and U.S. expats. We have a team of experienced loan officers who can help you navigate the mortgage process and find the best loan for your individual needs.

If you are a foreign national considering buying a home in the United States, we encourage you to contact America Mortgage. We would be happy to help you find the best mortgage for your individual needs. Get in touch with us at [email protected] to find out more.

10 Tips For Buying An Overseas Investment Property in 2023

Overseas Investment Property

Like all investment types, knowing what you invest in is essential to meet your financial goals and timeline.

As we enter 2023 with a cloud of economic uncertainty looming overhead, it becomes more critical than ever that you consider the right moves before buying an investment property, especially overseas.

Clear Investment Goals and Motives

Before starting, we often ask potential investors some serious questions.

Have they invested before?

What asset class do they invest in, and what is the rate of return on your investment?

Get The Right Facts

Before investing in a foreign country, you must consider researching property trends and reading up on its economic and political situation to ascertain its investment viability better.

You may also wish to familiarise yourself with the targeted country by visiting it or talking to people who have lived there.

What additional or hidden costs (e.g., flying over to inspect the property) to the purchase?

Should the investment not pan out as expected, have you considered your exit strategy?

Use Professionals To Help

You may also want to seek out independent and experienced real estate agencies who may be able to help you source for the type of property you wish to invest in, in the location you want.

Do seek legal assistance to ensure your investment is legal and your rights are protected.

You may also want to chat with your tax consultant to be fully aware of applicable or deductible taxes to lower your taxable income.

Accumulating Foreign Currency Reserves

The stakes are higher when investing in foreign properties.

We gather the highs and lows from a seasoned property investor on potential pitfalls to avoid when buying offshore properties.

Tip #1: Know Your Exit Strategy When You Buy A Property.

Buying is easy, but selling is the problem.

The exit strategies in every country differ as much as the growth cycles.

Before investing, you need to know the cities the locals migrate to for job opportunities. How long you invest and how to exit.

When you buy the “wrong” properties in the wrong neighbourhoods, you may find yourself stuck when you want to sell.

Tip #2: Local Property Knowledge

Having local knowledge in the country you want to invest in is critical.

Knowing where the locals are buying, the law of the land, and taxation are essential.

In some countries, you can only sell your property to a citizen.

It is best to do independent research before starting your investment journey overseas.

Tip #3: Comply To Overseas Taxation Requirements

Rental properties may be subjected to income tax and yearly filing similar to Malaysia’s.

It is essential to find out how to do this correctly.

Tip #4: Currency Fluctuations & Exchange Rates

When you buy a foreign investment property, ensure that you are prepared for currency fluctuation, as the exchange rates may change dramatically.

Tip #5: Property Management, Maintenance & Tenants

A professional project management company takes care of tenants, turnover for Airbnb rentals, and general maintenance.

You wouldn’t want to deal with a clogged WC halfway around the world.

Invest In US Real estate

Tip #6: Retrace Past Property Performance For Future Potential.

Investing in foreign properties can run into management problems, especially regarding Guaranteed Rental Returns (GRR).

During the Covid-19 pandemic, property prices and mortgages fell – The market in 2022 has picked up significantly, and 2023 will be better for international property investment.

Tip #7: Bear in mind currency fluctuations, political changes, or conflicts

Pitfalls like currency fluctuations, international political situations, or conflicts can also affect investments.

Tip #8: More Countries, More Property Choices – How To Manage Distance & Time Zone

Investing in foreign properties opens you up to more choices in a larger property market, but the distance from your home base can be an issue.

Unless you outsource the project management of your properties, trivial matters like changing a lightbulb or unclogging a WC can become a problem.

Tip #9: Location Distance From Your Properties

Finding a balance of easy accessibility and being as close to your properties vs. your returns is essential.

Would you want a property close enough to drive by but earns little in ROI or somewhere further away that earns passive income?

Tip #10: Ascertain Your Objective For Investing In Foreign Properties

The scenario differed from five years ago when many were buying foreign properties in a hot market – a trend that will not likely be repeated.

The trend these days seems to be investing in properties with an intention or objective in mind, for example, for studies or retirement.

Property is a significant investment, so take your time to find the right one.

After all, property investment is about location, location, location, whether domestically or abroad.

America Mortgages for Overseas Borrowers

Financing U.S. real estate for overseas borrowers, including foreign nationals and U.S. expats, is indeed possible through America mortgages. These specialised mortgage options cater to non-resident borrowers, allowing them to invest in U.S. properties. With America Mortgages, overseas investors can make informed decisions and achieve their financial goals in the U.S. property market. Connect with us today at [email protected] to find out more.

What is the 1% rule? Investing in U.S. real estate. 

Foreign Mortgage Loan

Building a real estate portfolio in the United States is easier than you’d think. As we all know, growing a real estate portfolio is an excellent way to provide long-term passive income and generational wealth building. For U.S. expats and non-residents, investing in the American property market might seem daunting, especially when you’re unsure about your mortgage options or even if there is an option to get leverage as a non-resident investor.

With strategic planning and an understanding of key principles, it’s possible to start real estate investing with less money and gradually expand a portfolio. This guide will explore practical strategies, the 1% rule, and how America Mortgages can assist U.S. expats and foreign nationals in financing their real estate portfolio.

How to Start Real Estate Investing in the USA with Less Money

For U.S. expats and non-residents looking to begin their real estate journey with leverage, there are several entry points to explore:

Understanding the 1% Rule in Real Estate Investing

The 1% rule is a fundamental principle used by real estate investors to evaluate the potential profitability of a property. According to this rule, the monthly rental income should be at least 1% of the property’s total acquisition cost. For instance, if a property costs $200,000, the monthly rental income should be $2,000 or more to meet the 1% rule.

Adhering to the 1% rule ensures that the property generates sufficient cash flow to cover expenses such as mortgage payments, property management, and maintenance while leaving room for a positive return on investment (ROI).

Determining a Good Cash Flow on an Investment Property

When it comes to investing in U.S. real estate, the location of the property is a critical factor that significantly impacts the cash flow potential. A good cash flow on an investment property refers to the surplus income generated after covering all operating expenses. Positive cash flow is essential for long-term sustainability and building a strong real estate portfolio. To calculate cash flow, deduct monthly expenses (mortgage, property taxes, insurance, maintenance, etc.) from the rental income. 

According to iPropertyManagement, rental prices have soared by an average of 8.85% annually since 1980. As of May 2023, here are the top 10 hottest U.S. rental markets, offering attractive opportunities for investors looking for profitable real estate prospects.

Median Monthly Rent Nationwide Since 1940, Selected Years

Median Monthly Rent Nationwide

A positive cash flow indicates that the property generates more income than it costs to maintain, providing a buffer for unexpected expenses and contributing to the investor’s overall financial stability.

The Ideal Cash Allocation in a Real Estate Portfolio

While building a real estate portfolio with minimal cash outlay, investors should carefully consider the allocation of their funds. It is generally advisable to keep a portion of the portfolio in cash or liquid assets to handle any emergencies, vacancies, or unexpected repairs.

The exact percentage to hold in cash may vary depending on an investor’s risk tolerance and investment strategy. However, keeping around 10-20% of the portfolio in cash is a common approach to ensure stability and flexibility in managing the portfolio.

America Mortgages U.S. Portfolio Financing 

Investors living overseas interested in purchasing multiple investment properties face challenges with multiple lenders and varying rates for each property. America Mortgages’ AM Portfolio+ loan program provides a solution with unique portfolio loans, offering long-term financing at fixed rates, either “Principal + Interest” or “Interest-only payments.” This flexibility simplifies the process, allowing one mortgage and payment as your portfolio grows.

AM Portfolio+ Lending Terms:

  • Loan to Values:
    • U.S. Citizens: Up to 75%
    • Foreign Nationals: Up to 65%
  • 1 Loan over multiple different properties – meaning one loan payment monthly and one underwriting process.
  • Rates are fixed for up to 30 years, allowing investors to plan for a constant rate and payment over the lifetime of the loan. There is no need to restructure the loan during the 30 years unless your plan is to extract equity in the future or lower the rate if interest rates improve.
  • Flexible prepayment penalties – Most people agree that we are at or near the high for interest rates in the near term, and eventually, they will start to come back down. Flexible prepayment penalties allow you to plan a potential refinance sooner if you feel rates will come down in the near term or longer out if you think it will take a few more years for rates to decline.

AM Portfolio+ Lending requirements:

  • Properties must be owned by a U.S. entity. America Mortgages Concierge can assist you in setting up a U.S. entity to hold the properties
  • Properties must be cash flow positive – generally 1.25 : 1 – meaning the property is bringing in $1.25 in rental income for each $1 in loan payments
  • Minimum property value: $75,000 per property 
  • Minimum loan amount: $250,000

Portfolio loans are a great way to quickly jumpstart or increase your real estate holdings in the U.S. As with most other items, buying in bulk can often result in lower prices per property or embedded equity in the portfolio versus buying the same homes individually.

Build a U.S. real estate portfolio with minimal cash outlay—achievable and rewarding for U.S. expats and non-residents. Explore financing options, understand the 1% rule, focus on positive cash flow, and maintain an appropriate cash reserve. 

Ready to start? Contact us at [email protected] and seize opportunities in the thriving U.S. property market. Visit for more information.