There are limited opportunities and options to make side money as an H1B visa holder due to the visa restrictions placed on them. According to findings provided by Investopedia, real estate is one of the most lucrative business people engage in. For people living in the US with an H1B visa permit, the question often asked is: can H1B visa holders invest in real estate?
As a person living in the US with an H1B visa permit, you can invest in real estate because it is considered a “passive income” and hence, does not violate the H1B visa restriction.
While it is possible to invest in real estate in the US with an H1B visa permit, there are certain risks you should be aware of. Like, there could be a possibility that your visa might not be renewed; so that means you might have to oversee and manage your property or properties (as the case may be), from your home country which can be tasking. In the course of this article, we will provide you with useful information regarding real estate investment by H1B visa holders; let’s delve in!
Can H1B Visa Holders Buy a House in USA?
A foreigner, like someone with an H1B visa permit, is eligible to buy a house in the United States. But there are some factors you need to know about.
One of the easiest ways to buy a house in the United States if you reside there with an H1B visa permit is an ‘All-cash purchase’, that is, paying the price in full and in cash. However, if you need an option of payment, like a mortgage, then you will have to fulfill certain requirements and provide some financial documents.
To get a mortgage for a house if you’re on an H1B visa permit, you must fulfill the following:
- You will need to provide an EAD (Employment Authorization Document) and a Social Security Number. If the contract you have with your employer will expire in less than a year, the mortgage lender may ask that you provide valid documents that your employer intends to remove your contract. This is because they need to know you’ll be around to pay the loan.
- You may be asked to provide your tax report for the past two years and sometimes, your bank statement for two months at least.
- You must be able to make a 20% down payment on the house.
- You must have been in the US for at least 2 years.
- You mu.st have a work experience of 2+ years in the U.S.
- You must have a credit score of 720 or more. Usually, a score of 780 above is ideal.
- You must have a means of income that must continue for the next 3 years at least.
As an H1B visa holder, you might even be eligible for a mortgage plan backed by the government. This type of mortgage is usually subsidized by the government to help you in cases where you begin to default.
Can H1B Visa Holders Buy Rental Property in USA?
As often stated, H1B visa holders are not allowed to seek employment from another employer who is not the sponsor of their visa with the exception of cases where they have a simultaneous H1B. However, people with H1B visa permits are allowed to “passively” take part in business, that is, they cannot actively engage in the business and get paid as it breaches their visa restriction.
The buying of rental services as a business for a person with an H1B visa is permitted as it falls under a passive income. However, there are certain information you should be equipped with if you decide to purchase a rental property in the US. These include; finding the right location to purchase a rental property; calculating for margins before buying the property;
understanding the need for the unexpected cost even after purchase; maintenance of the property after purchase; determining your return, and understanding your legal obligations. You must also be equipped with valid and beneficial information about securing a down payment; picking a good environment taking into consideration, factors like schools, average rent, amenities, future development, natural occurrence and disasters, job market, crime, and neighborhood. Lastly, you should be able to weigh the risks against the rewards.
Having considered, studied, and equipped yourself with all the above factors, buying the house is the next step. Banks usually have a strict lending procedure for investment priorities than primary homes. They conclude that when it gets tough, people would most likely jeopardize their business than their homes. So, be prepared to make a down payment of about 25% of the closing cost, have the property adequately examined by a professional, and get a real estate lawyer to review everything before signing the documents.
Also, don’t forget to pay for adequate insurance cover because the tenants’ insurance covers their belongings alone and not your building itself.
Can H1B Visa Holders Buy Commercial Property in USA?
For an H1B visa holder, there is no limitation to owning a business or several properties, but as often stated, you cannot perform any active duty relating to the business that would fall or can be categorized as employment that you will receive a salary or wage.
So, in short, you can buy, purchase, and own a commercial property in the United States provided you do not violate your H1B visa rule restriction as stated above.
Nevertheless, people ask how they can purchase and own commercial properties in the United States. We shall be taking a look at how that can be possible:
As an H1B visa holder, you can open a Limited Liability Company (LLC) and then buy commercial properties. However, you cannot work for any other company, even your own LLC because it is considered as unauthorized employment according to the regulations provided by the USCIS. Also, resigning from your current job to focus on your LLC and commercial property is not possible, because resigning from your job means you would have to return to your home country and further stay in the US is therefore illegal.
Owning a commercial property thus means that you would have to hire a manager for the property. The property manager would, in turn, manage the rent, reconstruction, and renovation of the said property. Directly performing these duties would also be a breach of the USCIS rules and regulations because you would be directly involved in the operations of your business.
Nevertheless, owning and investing in a commercial property is regarded as a passive investment which is totally legal. This is because the sponsors of the syndicate deal would be managing the property.
As an H1B visa holder, if you’re looking to buy commercial property, it is important you hire an attorney for legal advice. If you wish to know more about some of the rules, you can find additional info here.
Can H1B Visa Holders Get a Real Estate License in USA?
People living in the U.S. with an H1B visa permit can get a real estate license and be referred to as Realtors. However, one would have to take some courses before one can get the certificate of license. However, note that if you have gotten your license certificate, you cannot work as a Realtor while still on an H1B visa permit; you would also have to get your permanent residency green card.
The real estate license which enables you to become a Realtor is an authorization issued by the government. It gives agents and brokers alike the legal power to represent someone who wants to buy or sell a home in the process of selling or buying real estate. In order to be able to conduct such transactions in the United States, you are required, irrespective of your citizenship, to obtain a valid license.
According to MyVisa, before any company can employ or hire any foreign worker like someone with an H1B visa permit, can be employed or hired, it must file labor certifications with the Department of Labor (DOL) that it is going to pay the necessary wage for that position in the geographic area where the job is located.
The Labor Condition Application (LCA) date usually includes LCA submitted for new employment and also a change of continuation in the previous employment approved, concurrent employment, and change in employer. Normally, only new employment for LCA needs an H1B visa quota if it is not filled.
According to the test guide, if you want to take your state of residence licensing exams, you have to complete the necessary pre-licensing course schooling that is provided by your state. Note that the exams include a state and national aspect and each state has different exams that vary from exams in other states.
In conclusion, owning investment in real estate and buying commercial properties is totally possible as an H1B visa holder. However, you have to be careful not to violate your visa restriction; so, it’s best to hire an attorney to guide you legally through the process.