Differences in real estate in each major US city (California, Hawaii, Texas, New

Hello everyone.

Thank you for visiting our site and for your interest in New York real estate among other real estate investments around the world.

In this article, we will explain the differences in real estate in each major U.S. city and the characteristics of real estate in four cities: California, Hawaii, Texas, and New York.

Please read to the end.

Why Buying U.S. Real Estate is Attractive

The reason why purchasing U.S. real estate is attractive for investment purposes is, above all, the strength of the U.S. economy.Since the pandemic, it is no exaggeration to say that the world economy is dominated by the United States.

In addition, real estate investment in the U.S. offers attractive tax benefits that are not available in Japan.

To summarize real estate investment in the U.S., not only is it easy to earn capital gains due to the strength of the economy, but even if you earn large returns, you can reduce your tax liability due to the tax benefits.

However, even if we talk about real estate in the U.S. in one word, each city has various characteristics.In Japan, yields and targets differ between urban and rural areas, and the same is true in the United States.

Understand the characteristics and needs of each city before investing in real estate.

Real Estate Market Conditions in Each Major City

First, a brief explanation of the real estate situation in the U.S. as a whole.Compared to Japan, the U.S. has vast tracts of land, and land accounts for a small percentage of real estate prices.

Therefore, the value of real estate in the U.S. is high and the useful life is long, so 80-90% of the properties on the market are used properties.

The following is a detailed explanation of such U.S. real estate, focusing on the following four cities.

• California
• Hawaii
• Texas
• New York City

The best way to find the city that best suits your purpose is to learn about the characteristics of each city, but we will be happy to assist you in the city selection process.

California

It can be said that California real estate, whether for rent or sale, is hard to drop.That's partly because California has been a growth city for the past 30 years.

Located on the West Coast of the United States, California's industries include not only manufacturing, but also IT, trade, tourism, entertainment, and the military.

Los Angeles, home of the Dodgers, the team of Major League Baseball player Shohei Ohtani, is also located in California.

Silicon Valley is home to famous companies such as Google and Apple, and Hollywood is the undisputed center of the movie industry.

The concentration of government agencies, universities, and other institutions is another reason for the growth rate.

The only point of concern is that California real estate prices have already risen significantly.Going forward, any investment in California real estate must be closely monitored for price trends.

Hawaii

Hawaii can be described in one word: a tourism powerhouse.Investing in such Hawaii real estate may be a solid business opportunity for tourism-specific real estate.

U.S. real estate in general is very popular with investors from all over the world, and there are always opportunities for capital gains.

In addition, with Hawaii real estate, there is a certain demand for income gains from hotels, restaurants, tourist grocery stores, and tourist activity services.

In addition to owning and operating a condominium, special uses such as owning a condominium and using it yourself are also possible.Compared to the U.S. mainland, Hawaii's proximity to Japan can be said to be an investment method that takes advantage of its geographical location.

One concern is that the market is somewhat saturated due to the growing popularity among the Japanese.However, saturation is inextricably linked to popularity.

The key to success is to make business choices that can be supported by popularity.

Texas.

Texas real estate is characterized by stable income gains and high yields due to the abundance of properties and large working population.

Texas, the second largest state in the U.S., is located in the south, adjacent to Mexico.It has a variety of geographies, including forests, deserts, hills, and coastlines, and its abundance of nature is very attractive.

At the same time, it is known for its strong economy, which is supported by a wide range of industries from primary industries such as oil, natural gas, and agriculture to technology sectors such as aerospace and energy.

The high property tax rate but no income tax for the state, plus the high level of education, create an environment conducive to attracting a large population.

These factors contribute to stable income gains and high yields.

On the other hand, it is difficult to predict how far it will or will not go up when trying to earn capital gains.When investing in Texas real estate, you may want to consider the long term.

New York City

New York City is a treasure trove of real estate investment.Because New York real estate is the focus of investors from around the world, the balance of supply and demand is extremely skewed toward demand, making it difficult to lower the value of real estate as a result.

This situation is useful not only for the purpose of selling and earning capital gains, but also for converting cash into other assets.

On the other hand, due to high real estate prices, yields may not be expected to be great (compared to other cities).However, with the current situation, where people are still recovering from the pandemic and continuing to flow in, we can expect lower vacancy rates and higher rents.

One hundred years later and today, it is still the center of the world economy.That is the appeal of New York as a city and as real estate.

New York real estate can be a solid income and capital gain investment.

New York for tax savings for business owners?What are the two rationales?

Of the four cities we have introduced so far, New York City is our recommendation for Japanese managers to invest in real estate in the United States.

The rationale is twofold

• The high popularity of New York real estate
• New York Real Estate Prices

New York is by no means the only place to invest in real estate, as preference, fate, and timing are also important.

Please continue with this article to develop a concrete image of New York real estate investment.

The High Popularity of New York Real Estate

The high popularity of New York City creates a certain need for real estate because of the large number of people.The relatively immigrant-friendly United States attracts people from all over the world.

New York City is one of the most popular cities in the world.The large number of people who flock to the city helps reduce the risk of vacancy.In fact, the vacancy rate in Manhattan is in the low 3% range.

If cash flow is positive, returns are expected to be ample.

New York Real Estate Prices

It is said that buildings account for a high percentage of the price of U.S. real estate, but New York City is an exception.Especially on Manhattan Island, despite its popularity, land is limited.

Because of the value created by the land, prices tend to rise.In relation to this, yields tend to be lower, but it is also possible to sell the property and earn capital gains, as it is hotly sought after by foreign investors.

The high price not only finds an exit strategy of sale, but also contributes significantly to depreciation.It can be expected to reduce taxes on profits earned from the main business.In these aspects, it may be especially recommended for managers and business owners who are running a business.

Conclusion

In this article, we have explained real estate investment in the U.S. for each of the following cities

• California
• Hawaii
• Texas
• New York City

The characteristics of each city are summarized in the table below.

IGCGFeaturesConcernsCalifornia◎◎△It is a growing cityPrices may be rising all over the placeHawaii◎◎0Tourism-specific real estate ◎

For your own tourism

Vulnerable to pandemics and other unforeseen eventsTexas◎◎△High yieldsUnknown how far we can grow as a stateNew York△◎High capital gainsDue to lower yields, capital gains
are more attractive

IG: income gain
CG: capital gain

Thank you for taking the time to read this article.

Our company, Reinvent NY Inc, continues to assist individuals and companies who are moving to the US, buying or renting real estate in 2019, offering comprehensive services to support all aspects of the process.

We would be happy to discuss your needs with you once you contact us using the form below.

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Read the Japanese version of this article on reinvent.co.jp