Is investing in US real estate a good option in 2026

Is Investing in US Real Estate a Good Option in 2026? (Quick Answer)

Yes, for cross-border investors, the US stands out in 2026 as one of the more accessible and income-stable real estate markets, particularly for deploying capital into cash-flowing rental assets.

What makes the US distinct is the combination of DSCR-based financing (no US credit or income required), deeper secondary markets with stronger yields, USD-denominated income, and a relatively transparent legal and ownership structure. These factors make it easier to enter, scale, and manage investments remotely compared to many other countries.

However, the opportunity depends on execution: deals need to be structured around income, financing must align with property performance, and sufficient reserves are critical in a higher-rate environment.

Investing in US real estate in 2026 remains one of the more attractive options for global investors looking to deploy capital internationally. The market offers a combination of stable rental demand, income-focused opportunities, and a structured investment environment that is difficult to replicate in many other countries.

For cross-border investors, what makes the US stand out is accessibility. Financing based on property income, clear ownership frameworks, and the ability to invest in multiple high-yield markets create a more predictable path to building a portfolio.

At HomeAbroad, we’ve helped investors from 40+ countries close 500+ foreign national mortgages, and one pattern stands out: strong investments are rarely about timing the market, they come down to how the deal is evaluated, financed, and set up before closing.

This guide breaks down what the data shows, how the US compares as an investment option in 2026, and what it takes to structure deals that perform reliably over time.

Real Estate Market Outlook for 2026

For investors allocating capital across borders, the US market in 2026 presents a specific set of conditions, here’s what the data shows.

The market is no longer moving in one direction. Instead, it’s stabilizing, with outcomes increasingly tied to location, financing, and asset quality.

1. Pricing Trends

Home price growth is expected to remain modest. Forecasts from the National Association of Realtors point to ~2%–3% annual growth, with some projections showing flat to low-single-digit appreciation (0%–4%) depending on the market.

This level of growth is relatively stable compared to more volatile international markets, where price swings can be significantly higher in either direction.

Price appreciation is no longer the primary driver of returns, which makes income and deal fundamentals more important in evaluating investments.

2. Interest Rates & Financing Environment

Mortgage rates remain elevated compared to prior cycles. According to the Freddie Mac Primary Mortgage Market Survey, the 30-year fixed-rate mortgage as of May is around 6.23%, reflecting a higher cost of capital environment.

For foreign investors, this is still a workable environment because DSCR-based financing is available at these rate levels without requiring US income, credit history, or tax records, allowing deals to be structured around property performance rather than borrower profile.

Compared to markets where foreign buyers face strict lending barriers or no financing access at all, this remains a key advantage.

While rates may gradually ease, the expectation is stability rather than a sharp decline, meaning financing strategy continues to play a central role in deal performance.

3. Supply & Demand Dynamics

The supply-demand imbalance remains a key factor:

• Low new construction continues to limit housing supply
• The “lock-in effect” (where homeowners with low mortgage rates delay selling to avoid higher borrowing costs) is easing slowly
• More listings are expected to enter the market, but not enough to create oversupply

Demand remains stable, particularly in rental housing and more affordable market segments.

Compared to markets where supply can expand rapidly or demand fluctuates sharply, this creates a more balanced environment where inventory is improving but still constrained, supporting price stability rather than rapid growth.

4. Investment Activity & Capital Flows

Institutional and private investment activity is expected to recover. Insights from PwC’s Emerging Trends in Real Estate report show that industry sentiment has shifted from cautious to cautiously optimistic heading into 2026, with capital gradually returning after a slower 2024–2025 period.

The report also highlights that investors are prioritizing income stability and downside protection over speculative growth, reflecting a clear shift in how deals are evaluated.

Capital is becoming more selective, focusing on:

• Cash-flowing assets
• Strong rental markets
• Lower-risk property types

For cross-border investors, this aligns the US with global capital trends, where predictable income and risk-adjusted returns are taking priority over short-term appreciation.

Steven Glick,

Director of Mortgage Sales, HomeAbroad | NMLS# 1231769

“What we’re seeing right now is that appreciation is no longer acting as a safety net for deals. In prior cycles, you could get away with thinner numbers and rely on market growth. That’s not the case anymore. If a property doesn’t make sense based on current rent, expenses, and financing terms, it usually won’t hold up over time.”

Why US Real Estate Stands Out for Global Investors in 2026

For experienced investors, the question is not whether real estate works, it’s where it works best. In 2026, the US stands out not because of rapid appreciation, but because of how accessible, financeable, and scalable the market is for cross-border capital.

1. Financing Access Without US Credit or Income

At HomeAbroad, we offer DSCR-based financing specifically designed for foreign nationals, allowing investors to qualify based on the property’s income rather than US credit, employment, or tax history.

This means investors can access US real estate without:

• US credit history
• US employment
• US tax returns

In most global markets, this level of access is not common. Foreign buyers are often required to:

• Purchase all-cash
• Meet strict residency or income verification criteria
• Face limited or no financing options

This is what makes the US market, particularly through platforms like HomeAbroad, one of the few where leverage is both accessible and scalable for cross-border investors.

2. Higher Yield Potential in Secondary Markets

The US offers depth across multiple markets, particularly in secondary cities where gross rental yields typically range between 7%–10%.

Compared to Western European markets such as the UK or Germany, where yields often range between 3%–5%, the spread is significant.

For investors allocating capital globally, this difference directly impacts:

• Cash flow
• Return on equity
• Scalability

3. USD-Denominated Income

Rental income in the US is generated in US dollars, one of the most stable global currencies.

For investors based in:

• High-inflation economies
• Volatile currency environments

This provides a natural hedge:

• Income is preserved in a stronger currency
• Long-term purchasing power is more stable

Over time, this becomes a meaningful differentiator when comparing returns across countries, not just properties.

4. Legal Structure and Enforcement Clarity

The US provides a relatively transparent and enforceable legal framework for real estate ownership.

This includes:

• Clearly defined property rights
• Standardized transaction processes
• Established landlord-tenant laws

Compared to markets where enforcement is inconsistent or delayed, this reduces operational and legal uncertainty, especially for remote investors managing assets from abroad.

The advantage of the US real estate in 2026 comes from structural factors that make it easier to enter, finance, and operate investments at scale. For global investors, the combination of accessible leverage, stronger yields, USD income, and legal clarity is what continues to differentiate the US from other real estate markets.

How the US Compares to Other Common Cross-Border Markets

For investors evaluating where to allocate capital, the US is one option among several. Here’s how it stacks up against the four markets HomeAbroad clients most often consider as alternatives:

The pattern that consistently emerges: the US is one of the few major markets where leverage is accessible to non-resident buyers and yields are meaningful. The trade-off is exit-side complexity, FIRPTA and US estate tax rules add structural considerations that most other markets handle differently.

For investors who plan around them, this is manageable. For investors who don’t, it’s where returns get compressed.

Risks of Investing in US Real Estate in 2026

Real estate in the US remains a viable investment option in 2026, but it’s not a forgiving market. The margin for error is smaller, and deals that rely on optimistic assumptions are more likely to underperform.

For international real estate investors, these risks also need to be viewed relative to alternatives in other markets, not in isolation.

1. Higher Financing Costs

Borrowing costs remain elevated, which directly impacts:

• Monthly payments
• DSCR qualification
• Overall deal margins

Higher rates mean fewer deals “work” on paper, and those that do require tighter underwriting.

2. Slower Appreciation

The rapid price growth of previous years is no longer the norm. Most forecasts point to low single-digit growth or flat markets in the near term.

This creates a risk for investors who:

• Rely on short-term appreciation
• Plan quick exits
• Overpay assuming future growth will compensate

In this market, appreciation is uncertain in the short term and should not be the primary driver of returns.

3. Cash Flow Compression

With higher interest rates and rising expenses, many properties generate thinner margins.

Common pressure points include:

• Insurance costs (especially in states like Florida and Texas)
• Property taxes
• Maintenance and operating expenses

A deal that looks positive on paper can quickly become break-even or negative if assumptions are too aggressive.

4. Stricter Lending Standards

Financing is still available, but it’s more selective.

Lenders now focus more heavily on:

• DSCR thresholds
• Property-level performance
• Reserve requirements (6 months of PITIA)

This means:

• Fewer borderline deals get approved
• Underwriting gaps become deal breakers
• Preparation matters more before making an offer

5. Execution Risk (Often Overlooked)

In 2026, execution risk is higher than market risk.

Common issues include:

• Overestimating rent vs appraiser-supported rent
• Underestimating vacancy or repairs
• Poor property management, especially for remote investors

These are not market problems, they are deal-level mistakes, and they are the most common reason investments underperform.

6. Liquidity and Exit Constraints

Real estate is not a liquid asset, and that becomes more noticeable in a slower market.

For foreign investors, this is even more relevant due to factors like:

• Timing of sale
• Capital access at exit
• Regulations such as FIRPTA

These factors don’t prevent profitability, but they do affect how efficiently capital can be redeployed compared to more liquid asset classes.

Beyond general market risks, investing in US real estate introduces a set of structural considerations that are specific to foreign nationals.

7. FIRPTA Withholding at Sale

Under the Foreign Investment in Real Property Tax Act (FIRPTA), a buyer is required to withhold up to 15% of the property’s sale price (not profit) and remit it to the IRS when a foreign investor sells.

For example:

• A $400,000 sale → $60,000 withheld at closing

This is not the final tax, but a prepayment. Investors can apply for a withholding certificate (Form 8288-B) to reduce this amount based on actual gain.

The key point is that FIRPTA affects cash received at exit, which means it needs to be factored into return calculations at acquisition, not just at sale.

8. US Estate Tax Exposure

Foreign investors are subject to US estate tax rules that differ significantly from US citizens.

• Exemption for non-residents: ~$60,000
• Compared to $13M+ for US citizens

This becomes relevant as portfolios grow. Without proper structuring, estate tax exposure can significantly impact long-term wealth transfer.

9. State-Level Tax Variation

Tax treatment varies significantly by state.

Examples:

• Texas / Florida → No state income tax
• Georgia → Moderate state tax
• California / New York → Higher state tax burden

This directly affects net returns and should be factored into market selection, not just purchase price or rent.

10. Currency and Repatriation Risk

Rental income is generated in USD, but investors often convert it back to their home currency.

This introduces:

• Exchange rate fluctuations
• Transfer costs and timing differences

Over time, currency movement can either enhance or reduce actual returns, especially for investors operating across multiple currencies.

What This Means

The risks in 2026 are not hidden, they are structural and predictable.

• Higher financing costs
• Slower appreciation
• Greater reliance on execution
• Additional cross-border considerations

For global investors, the decision is not about avoiding risk, but understanding how US-specific factors compare to risks in other markets and pricing them correctly into the deal from the beginning.

Best Real Estate Investment Strategies for 2026

In 2026, real estate rewards strategy, not speculation. The focus has shifted from chasing appreciation to building returns through income, structure, and execution.

1. Cash Flow–Focused Rentals (DSCR Strategy)

This is the most reliable strategy in today’s market. Instead of betting on future price growth, the goal is simple: buy properties that generate stable income from day one.

For many investors, especially international buyers, this aligns directly with DSCR-based financing, where loan approval depends on the property’s rental income rather than personal income or credit history.

At HomeAbroad, this is the core approach we see working consistently, investors focus on properties that can qualify based on income and remain stable after closing.

What works here:

• Properties with positive or near-positive cash flow
• DSCR ≥ 1.0 for smoother financing
• Markets with stable rental demand and predictable rents

Steven Glick,

Director of Mortgage Sales, HomeAbroad | NMLS# 1231769

“From a lending standpoint, we always look at DSCR first because that determines whether the deal is even viable. Investors often focus on projected returns or cap rate, but if the property doesn’t meet the required DSCR for the loan program or rate tier, the deal doesn’t move forward. You have to underwrite to the financing, not just the upside.”

In practice, if the property cannot support its own financing, the deal rarely works long term.

2. Value-Add Properties (Forced Appreciation)

With slower natural appreciation, investors are turning to value-add strategies to create returns.

This involves:

• Renovating underperforming properties
• Improving rents through upgrades
• Repositioning assets in stronger rental segments

In most mid-market deals, renovation budgets range between $10,000–$40,000 depending on scope, with rent increases of $100–$300/month being common when improvements are aligned with market demand.

The reason this matters is that value-add returns are controlled, not dependent on market timing. However, the margin for error is tighter, which makes accurate cost estimation and conservative rent assumptions critical.

3. Buying Below Replacement Cost

In many markets, construction costs remain elevated due to labor, material, and financing costs. As a result, the cost to build a new property often exceeds the price of comparable existing inventory.

For example, if new construction costs average $180–$220 per sq. ft., but existing homes trade closer to $140–$170 per sq. ft., investors are effectively acquiring assets at a discount to replacement value.

This creates a built-in margin of safety:

• Downside is partially protected by construction economics
• New supply remains limited
• Existing assets become relatively more attractive over time

What we’re seeing in current transactions is that this gap is one of the more overlooked advantages in 2026, particularly in secondary markets.

4. Short-Term vs Long-Term Rentals

Both strategies work, but the trade-offs are clearer in a more disciplined market:

Across current market trends, there is a noticeable shift toward buy and hold rentals for long term, especially for investors prioritizing financing stability and predictable income.

5. Geographic Arbitrage

One of the biggest advantages in 2026 is the ability to invest across markets rather than being limited to where you live.

Instead of high-cost cities with compressed yields, investors are targeting markets such as:

• Cleveland, OH / Detroit, MI → higher cap rates, lower entry prices
• Memphis, TN / Birmingham, AL → strong cash flow-focused markets
• Tampa, FL / Dallas, TX / Atlanta, GA → balanced growth + income

These markets typically offer:

• Lower acquisition costs
• Strong rental demand
• More favorable cash flow dynamics

At HomeAbroad, we help investors identify and finance opportunities across these markets, making it easier to invest where the numbers actually work, not just where demand is highest.

Investors who focus on income, structure deals correctly, and choose markets strategically can still generate strong returns, even in a slower-growth environment.

How Foreign Nationals Can Invest in US Real Estate in 2026

For foreign nationals, the fundamentals of real estate investing don’t change, but the way deals are financed, structured, and executed does. In 2026, the biggest difference is not access to opportunity, it’s understanding how the US system works and aligning your strategy accordingly.

1. Financing Without US Credit or Income

Most foreign investors do not have US credit history or W-2 income, which limits access to traditional mortgages.

This is where HomeAbroad’s DSCR loans becomes the primary path. Instead of evaluating the borrower, we focus on whether the property’s rental income can cover its mortgage (PITIA).

At HomeAbroad, this is how most foreign investors enter the market, by qualifying based on the deal itself, not their personal financial profile.

This allows investors to:

• Buy property remotely
• Qualify without US income or credit
• Scale based on property performance

2. Ownership Structure Matters (LLC Setup)

Foreign investors typically purchase property through a US-based LLC.

This provides:

• Separation between personal and investment assets
• A scalable structure for multiple properties
• Operational flexibility for long-term investing

At the same time, it’s important to understand that ownership structure does not affect loan qualification, but it does impact taxation, liability, and long-term planning.

3. Rental Income Taxation (Key Setup Step)

By default, rental income for foreign nationals can be taxed at 30% on gross rent, without deductions.

Example:

• Monthly rent: $2,000 → Annual: $24,000
• Tax (30% gross): $7,200 owed

However, by making the Section 871(d) election, rental income is treated as net income, allowing deductions such as:

• Mortgage interest
• Property taxes
• Insurance
• Maintenance and depreciation

With the Section 871(d) election, income is treated as net income:

• Rent: $24,000
• Expenses (taxes, insurance, maintenance, depreciation, etc.): ~$14,000
• Taxable income: ~$10,000
• Tax owed (approx.): $2,000–$3,000

This single decision can significantly change your net returns, which is why it should be set up before the first rent payment is received.

4. US Estate Tax (Often Overlooked)

Foreign investors are subject to US estate tax rules that differ significantly from US citizens.

• Exemption for non-residents: ~$60,000
• For US citizens: $13M+

Example:

• Property portfolio: $400,000
• Taxable exposure: ~$340,000
• Potential estate tax: up to 40% on that amount

This becomes a critical consideration as portfolios grow and should be planned early through proper structuring.

5. How US Tax Treaties Affect Cross-Border Investors

The US has tax treaties with around 70 countries, but they don’t eliminate US taxes on real estate income. Rental income from US property is still taxed in the US at normal rates, regardless of treaty status.

Where treaties make a difference:

• REIT dividends & passive income: Can reduce withholding from 30% to 0–15%, depending on the country.
• Estate tax exposure: Investors from treaty countries may get higher effective exemptions, while non-treaty countries remain limited to $60,000.
• Avoiding double taxation: Treaties often allow foreign tax credits, helping offset US taxes against home-country liabilities.

6. Remote Investing Is Fully Operational

One of the biggest shifts in recent years is that you no longer need to be physically present in the US to invest.

Foreign investors can:

• Search and analyze deals online
• Secure financing remotely
• Close transactions through digital or notarized processes

At HomeAbroad, we’ve worked with investors from 40+ countries who complete the entire process remotely, from property selection to closing.

7. ITIN Setup (Required for Tax Filing and Income Reporting)

Before earning rental income or filing taxes in the US, foreign investors need an ITIN (Individual Taxpayer Identification Number).

This is required to:

• Report rental income
• File US tax returns
• Claim refunds (including FIRPTA withholding)

Without an ITIN, you cannot properly operate or optimize your investment from a tax perspective.

8. What Actually Determines Success

For foreign investors in 2026, success comes down to a few key factors:

• Choosing cash-flowing properties, not speculative deals
• Structuring financing that aligns with rental income
• Setting up ownership and tax treatment correctly from the start
• Working with systems and partners that support remote execution

Real estate investing in the US is fully accessible to foreign nationals, but it requires a different approach than domestic investing.

The advantage in 2026 is that the system is now more aligned with property performance rather than personal financial background.

Jason Saylor,

Sr. Customer Loan Specialist, HomeAbroad | NMLS# 2594493

“The biggest adjustment for foreign investors is understanding that the property is what qualifies the loan, not the borrower’s personal income or credit. Once you shift your focus to how the property performs the process becomes much clearer and more predictable from a financing standpoint.”

Is the US the Right Option for Your Capital in 2026?

For experienced investors, the decision is not whether to invest in real estate, but where to allocate capital. The US is one option among many, and the right choice depends on how it compares to your home market and alternatives.

1. Does USD Income Strengthen or Weaken Your Returns?

Rental income in the US is generated in USD.

This works in your favor if:

• Your home currency is volatile or depreciating
• You want exposure to a more stable currency

It can work against you if:

• Currency conversion costs are high
• Exchange rate movements reduce your effective yield

The key is to evaluate returns after currency conversion, not just at the property level.

2. Can You Set Up the Required Structure Before Closing?

Investing in the US requires a specific setup:

• ITIN (for tax reporting)
• US-based LLC
• US bank account

Without this structure, you cannot operate efficiently or optimize taxation.

At HomeAbroad, we help align financing and ownership setup early, but this still needs to be planned before committing capital.

3. Is Your Capital Sufficient for Cross-Border Investing?

Cross-border investing comes with friction, and small allocations often don’t justify it.

A practical baseline in 2026:

• 25% down payment
• 6 months of reserves (PITIA)
• Buffer for repairs or vacancies
• Closing costs

In our experience, deals rarely fail at purchase, they fail when reserves are too tight during the first vacancy or unexpected expense.

4. Do You Have a Reliable Local Execution System?

You are not buying just a property, you are buying into a system.

This includes:

• Property management
• Maintenance coordination
• Tenant handling

Without a reliable local team, even strong deals can underperform. This is one of the most common failure points for remote investors.

5. Have You Modelled US-Specific Exit and Tax Impacts?

Cross-border returns are affected by factors that don’t exist in many domestic markets:

• FIRPTA withholding (up to 15% of sale price held at closing)
• US estate tax exposure (above ~$60K for non-residents)
• State-level tax differences

If these are not factored in early, the actual return at exit can be significantly lower than expected.

What This Comes Down To

The US can be a strong investment option in 2026, but only when the full picture is considered, not just property-level returns.

For cross-border investors, the decision is less about opportunity and more about alignment:

• Currency
• Structure
• Capital size
• Execution capability
• Exit planning

Real estate investing works best for investors who approach it with clear goals, realistic expectations, and a long-term mindset. If those align with your situation, it can be a strong and reliable investment. If not, it’s better to recognize that upfront than adjust after committing capital.

Common Mistakes to Avoid in 2026

Most investment mistakes don’t come from picking the wrong market, they come from how the deal is analyzed and structured. The margin for error is smaller, which makes discipline more important than ever.

1. Underestimating True Operating Costs

Looking only at rent minus mortgage creates a misleading picture.

Commonly missed costs:

• Property management
• Maintenance and repairs
• Vacancy
• Insurance (rising in many markets)

This is where most “good deals” turn into break-even or negative investments.

2. Using Unrealistic Rent Assumptions

Investors often rely on listing estimates or optimistic projections.

In reality:

• Lenders use appraiser-supported rent
• Actual market rent may be lower than expected

The impact is immediate: if rent comes in below expectations, DSCR drops, which can:

• Push the deal below lender thresholds
• Change loan terms (higher rate or lower leverage)
• Or prevent the deal from closing entirely

3. Stretching on Down Payment or Reserves

Trying to enter a deal with minimal liquidity increases risk, especially in a higher-rate environment.

A practical baseline in 2026:

• 6 months of PITIA reserves
• Additional buffer for repairs or unexpected issues

Investors with strong reserves can absorb short-term disruptions. Those without them often face pressure early, even on otherwise solid deals.

4. Treating Real Estate as Passive Without a System

Real estate is not fully passive unless there is a system behind it.

Common execution gaps:

• Weak property management
• Delayed maintenance
• Poor tenant screening

For remote or foreign investors, this becomes even more important. The quality of your local team directly affects performance.

Jason Saylor,

Sr. Customer Loan Specialist, HomeAbroad | NMLS# 2594493

“The investors who succeed remotely are the ones who set up the full system before closing. That includes a property manager, insurance, CPA, and US bank account. Without that structure, small issues quickly turn into bigger problems, especially during the first vacancy or unexpected repair.”

5. Ignoring Local Regulations (Especially for STRs)

Short-term rental strategies can look attractive on paper but carry regulatory risk.

In many cities:

• STR permits are restricted or capped
• Zoning rules change frequently
• Enforcement has increased

Without proper due diligence, projected returns may not be achievable in practice.

6. Not Planning for Exit Early

Many investors focus only on acquisition, but exit conditions affect overall returns.

For foreign investors, this includes:

• FIRPTA withholding (up to 15% of sale price held at closing)
• Timing of sale and liquidity access
• Reinvestment delays due to withheld capital

If FIRPTA is not factored in upfront, the actual cash received at exit can be significantly lower than expected.

7. Missing the Section 871(d) Election

If not set up correctly, rental income can be taxed at 30% on gross rent, with no deductions.

This can apply early in the investment cycle and significantly reduce net returns if not addressed before the first rent payment.

8. Ignoring State-Level Taxes in Yield Calculations

Not all US states are equal from a tax perspective.

For example:

• States like Texas and Florida → no state income tax
• States like California or New York → significantly higher tax burden

Ignoring this difference can materially reduce net yield, even if the property appears strong on paper.

The common thread across these mistakes is not the market, it’s execution.

In a tighter environment, disciplined underwriting, adequate reserves, and strong operational setup matter more than ever. Investors who account for these factors tend to see more stable performance over time.

Conclusion

The US real estate market in 2026 is more accessible to foreign capital than it has been in recent cycles. The structure exists, financing is available, and markets with strong income potential are clearly identifiable.

The key question is not whether the opportunity exists, but whether your capital, structure, and execution approach are aligned with what the market requires today.

The investors who succeed in this environment are not the ones trying to time the market. They are the ones who:

• Prioritize cash flow over speculation
• Use data-backed underwriting
• Structure deals that can perform from day one

At HomeAbroad, we work with investors globally to help them identify, finance, and execute rental property investments that align with these principles. From deal evaluation to DSCR-based financing and remote closing, the focus is on making sure the investment not only qualifies, but performs over time.

If you’re considering investing in US real estate in 2026, the question is no longer just whether it’s a good investment. It’s whether the specific deal you’re looking at is structured to work in today’s market.

FAQ’s

About the author:

Steven Glick is the Director of Mortgage Sales at HomeAbroad and has over a decade of experience in the mortgage industry. As a licensed mortgage originator (NMLS# 1231769), Steven brings deep expertise in loan processing, sales operations, and non-traditional mortgages.

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