FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate

Foreign Buyers Taking Advantage of Affordable US Housing

The US housing market is experiencing a significant rebalancing. While many domestic buyers are effectively frozen out by high house prices and high mortgage rates, I’m seeing more strategic investment opportunities emerge in the most affordable US housing markets – and investors are buying!

After years of unsustainable price growth, certain regional markets have become unaffordable for average Americans. San Diego California have pretty much doubled since 2019, far outpacing income growth. In fact according to new research, California residents can spend around 50% of their income on housing costs.

With that in mind, it’s no surprise that home sales have dropped significantly and inventory is building. That market desperately needs to rebalance. But this much needed market correction isn’t uniform in every market across the country.

Related: Best US Property Markets for Foreign Investors

The Regional Opportunity Divide

While overheated coastal markets face price corrections, the Midwest offers remarkable affordability and more stability. As such I’m focusing our foreign investor clients on these more-balanced markets.

Cleveland is a great example. With median household income around $70,000 and median sold prices at $185,000, the market remains healthy even at current interest rates. Why? Because the median income can afford to purchase a median-priced house.

At the same time, house prices in Cleveland are still way below the national average, and there is still a significant lack of good quality homes for people to buy. In my experience, those kind of market dynamics manifest in continued steady price appreciation over the long-term.

As investors, if we take a conservative approach to underwriting our deals, and create the best possible rental product for the local market, we can still pick up excellent deals that generate consistent and reliable cashflow. Over time, the asset pays for itself, and we get to ride out these short-term market cycles.

Related: Top US Housing Markets for First Time Investors in 2025

Negotiating Power Shifts to Buyers

The current market freeze has created negotiating advantages we haven’t seen much of in recent years. Sellers are offering better pricing and larger concessions.

For our international investors, this means opportunities to cover closing costs and even buy down interest rates to improve monthly cash flow. When sellers are house flippers or builders, they’re accumulating expensive interest costs for every day properties sit unsold.

This extra marketing time can also tie up their working capital, creating significant leverage for our buyers that simply didn’t exist during the hot market where houses sold super-quick and everyone was paying full price.

Conservative Underwriting for Today’s Market

We’ve adjusted our approach to ensure properties remain profitable for us and for our clients. Our underwriting now factors in more conservative rent growth projections and higher interest rate scenarios.

We’re also focussing on asset quality. We look for properties that are in great shape – usually recently renovated – with long useful life in expensive capital items like roofs, sewer lines, windows, HVAC systems, and furnaces.

This helps us to limit future capital expenditure and repairs costs which can eat into cashflow.

On a more surface level, high-quality renovations in kitchens and bathrooms, and high quality interior remodels help attract higher quality tenants who are more capable of paying their rent on time, and tend to stay in the property longer. This is huge for rental property investors because it reduces management and turnover costs and stabilizes cash flow.

Related: Top 10 US Counties for Single Family Home Investors

Demographic Shifts Creating New Opportunities

The average homebuyer age in America has reached a record high of 56. This demographic shift signals both challenges for domestic buyers and opportunities for our international investors.

Millennials are buying homes later in life than previous generations. Many prefer renting where they live for location flexibility while building long-term wealth through investment properties instead of their primary residence.

In many markets it’s cheaper to rent than to buy a home, so it makes sense to pay less rent and have a landlord take care of repairs, improvement and property taxes while their rental income covers those costs (and the mortgage) on their investment properties.

We’re also seeing increased demand for multi-generational housing. Properties with layouts accommodating multiple family sections are becoming particularly valuable investment targets as more than one generation live together to keep down housing costs – especially as millennials save for a deposit on their own home, or elderly parents require care that is for many families unaffordable in the private sector.

Related: The Top 10 Most and Least Affordable Housing Markets in the US in 2025

The Foreign Investor Advantage

Foreign investors face unique challenges in the US market, but these can become advantages with the right approach. The biggest hurdle by far is finding quality local partners to work with.

Property managers, contractors, realtors, lenders, attorneys, and title companies who understand international investors’ needs are essential. I’ve been buying property in the US as a foreigner since 2016, so building this team is where we provide critical value for our overseas clients.

Unlike domestic buyers who rely on conventional financing tied to Federal Reserve rates, our foreign investors utilize DSCR loans (Debt Service Coverage Ratio) from commercial lenders. These loans qualify based on the property’s income rather than personal income, making them ideal for non-US residents without US credit history.

Related: Growing Housing Affordability Gap Creating Golden Opportunity for Investors

Economic Stability in Target Markets

While some express concerns about mass layoffs, we’re seeing stable employment in our target investment markets. Cleveland’s economy, for example, is supported by strong healthcare, manufacturing, and finance sectors.

The healthcare sector, led by the Cleveland Clinic, employs the largest number of workers and remains relatively recession-proof. This creates stability for real estate investments.

Once of the main headwinds for the Cleveland economy has been population decline, but that seems to be reversing. In the latest numbers for the US Census in 2025, the population in key regions like Cuyahoga County have start to increase for the first time in decades. This, combined with multiple multi-billion investment projects in infrastructure and leisure facilities around the city signal a turning point for the Cleveland economy.

Related: Top 5 Riskiest US Property Markets in 2025

Technology Enabling Remote Management

Managing US investment properties from abroad requires robust systems. We utilize specialized rental property management software that provides snapshot reports of individual property performance at a glance.

This technology – in partnership with competent local property management teams – allows us to focus on ROI optimization by identifying problem areas before they escalate. For our international clients, this remote visibility creates confidence in their investments.

Related: Top 10 Counties for Single Family Home Investors in 2025

Long-Term Perspective

Real estate markets are cyclical. There hasn’t been a 10-year period in US history where home prices haven’t appreciated. Current market conditions simply require a slightly more considered approach.

By focusing on conservative underwriting, quality property management, and avoiding excessive leverage, our foreign investors can position themselves for long-term success. Time becomes the ally of the disciplined investor.

Essentially, we’re focussing on asset-quality and cashflow, and then letting time do the heaving lifting for us.

Related: Cleveland’s Population Shift is Driving Real Estate Investing Opportunities

Enhanced Due Diligence

As inventory levels rise, we’re emphasizing a thorough approach to due diligence. Independent appraisals are essential to ensure accurate valuations.

Comprehensive home inspections – general, roof, sewer line – help identify potential issues before purchase. This prevents overpaying or acquiring properties with expensive hidden problems.

The current market allows time for proper evaluation and deeper negotiations, a luxury not always available during the frenzied seller’s market of recent years.

Related: Hidden Risks for Section 8 Property Investments

The Path Forward

For non-US investors, the current housing market freeze presents strategic opportunities. By focusing on affordable housing markets with strong fundamentals, ensuring positive cash flow, and leveraging specialized financing options, foreign investors can build wealth while domestic buyers remain side-lined.

The key is working with experienced partners who understand both the US market and the unique needs of international investors. With proper guidance, today’s market conditions offer rare advantages for those positioned to act.

FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate