Analysis of common pitfalls in investing in US real estate: Five common misunderstandings that novices should beware of when buying a house

There seem to be many opportunities to purchase investment properties in the United States, but if you lack knowledge of the market and processes, you will often fall into some common investment traps. Especially for international buyers or first-time investors, avoiding pitfalls is the first step to ensure returns.This article will help you avoid the five most common misunderstandings when looking for investment properties in the United States.

1. Only look at the price and not the location

Many investors are attracted by low-priced properties, but ignore the fact that location is the key factor that determines long-term appreciation .

Priority should be given to areas with rapid population inflow, complete infrastructure and high-quality school districts.
Be cautious when purchasing properties on the city fringe or in areas with “low prices but high vacancy rates”.

2. Ignoring the Difficulty of Property Management

Investing in real estate is not a one-time thing.

If you do not hire a professional property management company, self-management may lead to problems such as untimely maintenance and tenant disputes.
It is recommended to evaluate management costs in advance and choose areas with mature management resources.

3. Not taking full account of holding costs

In addition to the purchase price, investors also need to bear:

Property taxes (some states, such as New Jersey, have higher tax rates)
Home insurance, repair and maintenance fees
HOA fees (for communities with property management)

✅ The right approach: Create a comprehensive annual spending budget model.

4. Believe in promises of high returns

There are many "guaranteed rental returns" and "guaranteed profit projects" on the market, but in fact there may be high vacancy rates or artificial speculation behind them.

You should check historical data, rental trends and local regulations before investing .
Do not make decisions based solely on the developer or agent's one-sided statement.

5. Ignoring legal and tax risks

U.S. real estate regulations vary by state, and tax structures are complex.

Foreign investors need to understand FIRPTA provisions
Issues such as capital gains tax and property inheritance involved in the buying and selling process

to consult professional lawyers and tax advisors in to ensure compliance .It is recommended to consult professional lawyers and tax advisors in advance to ensure compliance.

summary

Investing in U.S. real estate has great potential, but it also comes with risks. Avoiding common pitfalls and establishing correct investment thinking and risk awareness are the keys to achieving stable returns.