How International Investors Are Buying U.S. Real Estate and What Types of Properties They Prefer

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The U.S. real estate market continues to attract substantial international investment, with global buyers pouring $56 billion into residential property. But beyond the sheer volume, how are these transactions happening, and what kinds of properties are capturing the most interest? For property investors looking to understand the mechanics and preferences of the international market, diving into financing methods, property types, and location choices is crucial. Let’s uncover the strategic approaches that define today’s foreign investment landscape in U.S. real estate.

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The Power of All-Cash: A Competitive Edge

One of the most defining characteristics of international real estate investment in the U.S. is the prevalence of all-cash purchases. The latest data reveals that nearly half (47%) of all international buyers pay cash for their properties. This is a stark contrast to the broader U.S. market, where only 28% of all existing-home buyers pay all-cash.

This preference for cash is even more pronounced among foreign buyers living abroad, with 64% of non-resident foreign buyers making all-cash purchases, compared to 35% of resident foreign buyers. This strategy offers significant advantages:

• Increased Competitiveness: Cash offers are often more attractive to sellers due to faster closing times and reduced risk of financing falling through.
• Avoiding High Interest Rates: As Lawrence Yun, NAR Chief Economist, pointed out, “To some degree, due to stubbornly high mortgage rates, a greater share of international home buyers paid cash.” This allows investors to bypass the impact of rising borrowing costs.
• Simplicity: Cash transactions can simplify the buying process, especially for those unfamiliar with the U.S. mortgage system.

All that said, there are some fantastic mortgage options for foreign nationals and non-residents. About half of our clients use leverage in one form or another. The most popular loan option so far this year has been a DSCR loan by a big margin. Those kind of loans are much easier to get approved for by foreigners due to the fact the lender uses the property income to underwrite the loan. That makes them more accessible for foreigners without U.S. credit, income, or a SSN.

Related: The Best U.S. Real Estate Markets for Foreigners Seeking Cashflow and Equity Growth in 2025

Property Preferences: Single-Family Reigns Supreme

When it comes to the type of residential property, international investors show a clear and consistent preference for traditional homes. A significant 77% of foreign buyers purchased single-family homes or townhomes. Condominiums accounted for only 10% of purchases, while other property types like commercial, land, or co-ops made up 12%.

This strong preference for single-family residences and townhomes highlights a focus on stable assets that often offer:

• Long-Term Appreciation: These property types typically see consistent value growth over time.
• Rental Income Potential: Single-family homes are highly sought after by renters, providing a steady income stream for investors.
• Family Appeal: Many foreign buyers intend for family members to use the property, making a house or townhome a practical choice.

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

Location, Location, Location: Suburban Allure

While urban centers and resort areas certainly attract international capital, the data indicates a strong leaning towards suburban locations. 44% of foreign buyers purchased properties in suburban areas. This reflects a desire for space, good schools, and a quieter lifestyle, often at a more accessible price point than major city centers.

Urban/central city areas still attract 26% of buyers, appealing to those seeking cosmopolitan living and high-density investment opportunities. Resort areas account for 18% of purchases, driven by vacation home and short-term rental strategies.

Related: The 7 Best U.S. Real Estate Markets to Buy Rental Properties in 2025

Investment Motives: Beyond Just a Primary Residence

The motivations behind international real estate purchases are diverse, but a significant trend is clear: nearly half of these transactions are for investment purposes or vacation use. A substantial 47% of foreign buyers purchased property for use as a vacation home or for rental income. Only 34% intended to use the property as a primary residence.

This highlights a strategic, long-term approach from international investors, viewing U.S. real estate as a robust asset for wealth accumulation and income generation. The strong protection of private property rights in the U.S. is a fundamental draw for global capital, as Lawrence Yun reiterated, citing it as a key reason foreign buyers are “drawn to investing in American real estate.” This legal stability provides peace of mind and confidence for overseas investors.

Understanding these preferences and strategies is key for any property investor. The clear trend towards all-cash transactions, single-family homes in suburban areas, and a focus on long-term rental or vacation use paints a clear picture of how discerning international investors are capitalizing on the U.S. real estate market today.

My Two Cents…

Most of the properties we source for our overseas clients are single family and small multifamily properties in the suburbs of secondary markets in the Midwest, Northeast and South. Those are the kind of deals where we’re seeing the best combinations of cashflow, and nice slow and steady capital appreciation.

While coastal markets will always be most popular with lifestyle buyers, the less glamorous working class neighbourhoods in the rust belt make for the best rental property markets. Housing affordability is decent, cashflow is reasonable, and houses prices are climbing steadily year-over-year. With the right kind of investment strategy, financing, and property management, those assets tend to pay for themselves many times over.

Previous Article: Top U.S. States for Foreign Real Estate Investment 2025

Frequently Asked Questions (FAQs)

How do most international investors finance their U.S. real estate purchases?

Nearly half (47%) of all international buyers pay all-cash for their U.S. properties. This is significantly higher than domestic buyers and provides a competitive advantage, especially in markets with high interest rates. Foreign buyers who live abroad are even more likely to make all-cash purchases (64%) compared to resident foreign buyers (35%).

What types of properties are most popular among foreign buyers?

The vast majority of international buyers (77%) purchase single-family homes or townhomes. Only 10% buy condos, and 12% buy other property types like commercial or land. This preference highlights a focus on traditional residential assets with long-term rental or appreciation potential.

Where are international investors primarily buying in the U.S.?

International buyers show a strong preference for suburban areas, with 44% purchasing properties there. Another 26% buy in urban/central city areas, and 18% in resort areas. This suggests a blend of investment strategies, from stable suburban rentals to high-demand urban and vacation markets.

What are the main reasons international investors purchase U.S. property?

A significant portion of foreign buyers (47%) purchase U.S. properties for use as a vacation home or for rental income. Other reasons include primary residence (34%), for a family member’s use (9%), or for student housing. The strong protection of private property rights in the U.S. is also a key motivator for global capital.