The Ultimate Guide for China Citizens Buying Real Estate in the USA

Buying US real estate is not only about finding a place to live or a property to put money into, it’s also a way to invest in US dollars (the most stable currency in the world). It’s a great way to protect your money from inflation and is viewed by many as a means to safely store your capital. And the Chinese people know that — that’s why there are a lot of Chinese buying US real estate.

They are the number 1 investors in US real estate, per volume of dollars spent in the US real 

estate market. Chinese have collectively spent over 230 billion dollars investing in US real estate, since 2009. There were a few dips here and there, especially during COVID-19, when all markets were a bit down, but even that didn’t stop the Chinese from buying property in the US. During those two years (2021 and 2022), they’ve invested almost 10 billion dollars in US property. 2023 marked the year of the big return of Chinese investors. During this year, the amount of money Chinese spent on US real estate has reached 13 billion dollars (which is an increase of more than 100%, when compared to the numbers from 2021 or 2022). 

Can a Chinese Citizen Buy US Real Estate?

Yes, they absolutely can! There are no restrictions for Chinese citizens and most other foreign nationals who want to purchase property in the US. As a matter of fact, the citizens of China are amongst the most prolific buyers of US real estate. Since 2010, more than 330,000 Chinese nationals have bought residential properties in the US. According to the most recent real estate statistics on foreign investment in the US, Chinese citizens represent around 13% of all foreign buyers in 2023 and have collectively spent over 13 billion dollars during that same year. They are, by far, the biggest foreign investors in US real estate in terms of dollar volume.

Why Are Chinese Buying Property in USA?

There are many different reasons why Chinese are buying US real estate. The most common ones include:

Chinese Buying Property in USA as an Investment

Around 11% of all Chinese buyers have bought US property for one single purpose: to rent it out and generate passive income. The numbers (in terms of rental yield) are far better than in China. This, coupled with affordable property prices is the reason why so many Chinese citizens purchase rental property in the US.

Chinese Buying Vacation and Rental Properties in USA  

Another reason why Chinese buy US property is to have a vacation home. Some use it strictly for vacation purposes (around 13% of all Chinese buyers), while others use it for dual reasons: for vacation and short-term rentals. The latter is a great way to earn some passive income. Instead of having a property vacant for most of the year (when they’re not vacationing there), a lot of Chinese nationals choose to rent it out during the period when they’re not using it.   

Chinese Buying Property in USA for Student Use

The United States, apart from other things, is famous for the quality of its educational institutions (especially higher education). Harvard, Yale, Princeton, MIT, and Stanford are just some of them, and they are famous for having the highest educational standards in the entire world. For those reasons, many Chinese nationals send their kids to the US — to ensure they get the best possible education. And, for that reason, many Chinese buyers purchase property so their children can have a place to stay while studying in the US. In fact, around 8% of all Chinese buyers have bought US property with that exact thing in mind — for student use.

It’s much smarter to spend money on loan payments for a property that you’ll eventually own than to simply pay rent for a student. And, if the property is big enough, the possibility of adding roommates (tenants) who can help out with the loan is always open.

Chinese Buying a Main Residence in USA  

There are a lot of Chinese citizens who are looking to make a permanent move to the US. In 2019 alone, more than 2,5 million Chinese people immigrated to the US. Their reasons for doing that can vary depending on each person and their situation, but one thing’s for certain — a lot of them will need a permanent place to live. Which is why more than 38% of all Chinese buyers chose to buy their primary residence in the US.

We can help you purchase property US.

Where in the Are Chinese Buying US Real Estate?

Chinese nationals buy property across the entirety of the US. But, there are some places that particularly stand out, and they are:

• Around 33% of all Chinese buyers in 2023 have bought property in California.
• 16% of all Chinese buyers in 2023 purchased a property in the state of Florida. 
• 8% of all Chinese buyers in 2023 have bought real estate in the state of Texas.
• 6% of all Chinese buyers in 2023 have bought real estate in Colorado.
• 6% of all Chinese buyers in 2023 have bought properties in the state of New York.

Other US states that are popular with Chinese buyers include:

• Georgia
• Illinois
• Nevada
• North Carolina
• Kentucky
• Pennsylvania 

Chinese Communities in the US

There are over 5,4 million Chinese and people with Chinese ancestry living in the US. They are and have been an integral part of the United States since the beginning of the 19th century. Chinese live, work, and immensely contribute to the great US economy and have established a lot of communities across the country. The places in the US that have the largest Chinese communities are in:

• New York and its metropolitan area  — It’s estimated that almost 900,000 Chinese and Chinese-descendant people live in the New York metropolitan area. Around 600,000 of those live in New York City proper.
• Los Angeles County — According to the numbers from the 2021 census, there are close to 450,000 Chinese people living in Los Angeles County.
• San Francisco and its metro area — There are around 180,000 Chinese people who live directly in San Francisco according to the 2021 information. In the entire metro area, there are about 460,000 Chinese-born people. 

3 Essential Tips for Chinese Buying US Real Estate

Depending on your specific situation as a Chinese buying US real estate, the journey you take to buy property in the US will be yours only and truly unique. Nevertheless, there are some things that are universal, no matter who the person is and what their exact circumstances are. Here are some essential tips that will be of great value to any Chinese buying property in the USA.  

1. Determine What Kind of Property Are You Looking To Buy

The only thing that you should focus on at the start, as a Chinese buying US real estate, is to figure out exactly what sort of property you are looking for. This will have an influence on the location of your future property, so be sure to think about this carefully. 

For example, if you’re looking to purchase a vacation home, you could take a look at single-family homes or apartments (depending on how much space you want). On the other hand, if your goal is to invest in rental properties, your first concern should be numbers — how much money can said property generate? If that’s the case, you should be checking out:

• Single and multi-family residential homes
• Apartments and apartment buildings
• Commercial property and buildings

2. Choose the Location

Once you’ve settled on the type of property you want to purchase, it’s time to look for a location. The US is very large, so finding a good one shouldn’t be a problem. 

For example, if you’re interested in short-term rentals and Airbnb investing, you might wanna check out states like Florida or California. If your goal is to purchase residential real estate for long-term rentals, places like Milwaukee offer a great balance between the initial investment and return. There, the average home price is around $180,000 which is very affordable, considering the average rent is about $1,400 per month. 

Another thing that can affect the location, especially for those looking to purchase rental property, is whether or not the specific US state is landlord-friendly. If it is, the taxes on rental income are lower, the landlords have more protection and can easily evict tenants who don’t pay rent or violate any part of their lease (i.e. rental agreement). Some of the landlord-friendly states include:

• Florida
• Arizona
• Illinois
• North Carolina
• Texas

3. Find the Property

You know where, and you know what type your ideal property is, the only thing that’s left to do is find it. If you have intimate knowledge about the US real estate market, you could try doing it yourself. Just remember, if you choose to do that, it will take up a lot of your time. 

Another option would be to get a real estate agent who has experience in dealing with international clients. They will help you find your property and will save you quite some time, but will ask for a commission in return. 

We can connect you with real estate agents with international experience.

Financing Options for Chinese Buying US Real Estate

47% of all Chinese buyers in 2023, have bought property in the US through an all-cash purchase (they paid for the entire property in cash). Others went in a different direction and have chosen one of the many financing options that are available to Chinese citizens buying property in the US. 

There’s a common misconception amongst foreign buyers that getting a US mortgage is much more difficult than it actually is. Yes, there are some mortgage loans that are only available to US citizens, but there are also those that are accessible to foreign nationals and that don’t require a US credit score or history.

The most popular ones include:

Foreign National Mortgage Loans

A foreign national mortgage loan is a type of non-QM loan. It’s not regulated by the US government and is available to all foreign nationals, (including Chinese citizens), who wish to purchase US property. The main purpose of this type of loan is to provide a secure financing option to foreigners who, for whatever reason, can’t qualify for conventional mortgages. This type of loan can be used to purchase rental or residential properties (i.e. main residences). 

 The main requirements of foreign national mortgage loans for Chinese buyers include:

• Having a valid passport and VISA is almost always a prerequisite for getting approval for foreign national mortgage loans.
• A down payment of around 20-25% of the property’s value is what Chinese buyers can expect to pay for this type of loan.
• Some lenders may request to see a US or International credit score before they approve a loan application.  
• SSN or ITIN (ITIN is for those who can’t get an SSN).
• Documentation that shows job history, income, or assets (depending on the lender)

Debt Service Mortgage or DSCR Loans

DSCR loans are investor-only loans, meaning that they are solely reserved for Chinese nationals who want to purchase rental properties. They are much easier to get, when compared to other types of loans, but have some additional requirements as a way to mitigate risk for the lenders.

The main requirements for DSCR loans include:

• DSCR of 1 or higher — DSCR is a metric used by leaders to determine whether or not a specific rental property will be able to generate enough income to repay the debt service.
• Down payment between 20-25% 
• A credit score of 620 or higher — this will depend on the lender and some won’t require you to have a US credit score at all.
• 1007 Rent schedule — a document that entails information about the property’s potential rental income and costs.
• Documents about cash reserves or assets — The main reason for this is to prove that you have enough financial power to at least pay off some of the loans.

The Federal Housing Administration (FHA) loans  

The main appeal of FHA loans is their down payment, which can be around 3,5% (in some cases). This does sound attractive, but it unfortunately comes with requirements that not every Chinese buyer will be able to fulfill. But, for those that can, here they are:

• Valid US visa or US citizenship
• US credit score of 580 or higher
• Proof of job and steady income (W-2 forms or other types of documentation)
• Various safety and security standards that the property has to fulfill 

Conventional Mortgage Loans

Conventional mortgage loans, just like the FHA loans, have a bit more requirements than the first two loans we’ve mentioned. To get one, you’ll need:

• Credit score of 620 or higher

• Down payment between 3-5%

• Extensive US job history and stable income — most lenders will require some sort of documentation as proof of this
• Professional appraisal — to get a conventional loan, the value of the property you’re interested in will have to be appraised by a licensed appraiser.

Looking to Purchase Property in the US?

NRI is a one-stop shop for all foreign nationals looking to buy US real estate. We are a mortgage broker, certified in all 50 US states, with a focus on dealing with international clients. Our team can connect you with real estate agents across the US, all with one goal — to help you find and purchase your ideal US property. 

We offer general counseling, can help you find the best loan deals and financing options, and we’ll be there to ensure filing and planning for taxes is all done in accordance with US laws (federal, state, and local). 

Book your free consultation today to see what we can do for you!