Real Estate Investing in Ohio: A Guide for Foreign Nationals

Empower Your Real Estate Ventures by Investing in Real Estate in Ohio

Maximize the potential of Ohio real estate investing with Waltz. Whether you're securing a mortgage for a new property, seeking to lower interest rates, shorten loan terms, or access equity for further investments, we provide customized mortgage solutions tailored to your unique needs as a foreign national. Keep reading to learn how the team at Waltz can help you realize your dream of owning investment properties in Ohio!

We are providing the following discussion to you for informational purposes only. All investments, including real estate, involve risk, and we encourage you to invest carefully. The information in this article is not intended to replace or serve as a substitute for any legal, real estate, tax, or other professional advice or service. You should consult with a professional in the respective legal, tax, accounting, real estate, or other professional area before making any decisions or entering into any contracts relating to a rental property.

What are Foreign National Mortgages?

Securing financing for a U.S. property can be challenging for non-residents. Foreign national mortgages are designed to bridge this gap, offering tailored solutions for international investors.

At Waltz, we specialize in foreign national mortgages, providing financing options for non-U.S. residents looking to invest in Ohio real estate. Our deep understanding of Ohio’s unique financial, legal, and regulatory landscape allows us to offer mortgages that meet your specific needs.

While foreign national mortgages often have different terms than those for U.S. residents due to increased lender risk, our team is committed to guiding you through the process to ensure a seamless Ohio investment experience.

Benefits of Investing in Ohio Real Estate for Foreign Nationals

With its thriving economy, broad housing market, and advantageous investment options, Ohio has emerged as a preferred destination for investors from across the world looking to invest in the United States.

One of the primary reasons Ohio is such an appealing market is its strong fundamentals. The state is well renowned for its thriving industries, which include technology, healthcare, finance, and manufacturing. This economic stability translates into a high demand for houses and investment.

Ohio also provides a diverse range of investment opportunities, from urban regions like Columbus and Cleveland to scenic attractions like Hocking Hills and the Lake Erie beachfront. Whether you're looking for real estate investing in Ohio through single-family houses, multi-unit properties, or holiday rentals, you're likely to find an opportunity that meets your investment needs.

A few more reasons why real estate investors flock to Ohio:

Ohio has a strong Gross Domestic Product (GDP) of over $640 billion, ranking it among the top states in the U.S. for economic output.
Real estate costs less than the national average, with a median house value of $234,640.
Cities like Columbus and Cincinnati have a lot of renters. In Columbus, Ohio’s capital city, renters make up 55% of all households, outnumbering homeowners.
Ohio has strong property rights, which means that the government has limited ability to seize private property without fair compensation. This provides investors with peace of mind concerning their properties.

Specific Considerations for Mortgages in Ohio

Ohio can provide the right investor with the perfect mix of affordability, Midwestern charm, and potential for high rental returns. However, there are a few things to be aware of before you commit to an Ohio mortgage. These include:

Variable Climate: Ohio experiences diverse weather conditions, with hot, humid summers and snowy winters. This can impact property maintenance and insurance costs, especially in flood-prone areas near major rivers.
Largely Rural: While Ohio has a handful of large cities, most of the state is rural farmland. Of Ohio's 88 counties, 83 have over 50% of their area classified as rural, and 65 counties are more than 90% rural. This can limit access to airports, entertainment, shopping, and other amenities.
Rust Belt Decline: Ohio is part of the Rust Belt, a region that once dominated U.S. manufacturing. Declining industrial jobs and factory closures have led to economic challenges in many Ohio areas, including decay and limited employment opportunities.‍
High Property Taxes in Urban Areas: Columbus and Cleveland rank among the top 15 metro areas in the U.S. with high property taxes. High taxes can eat into your rental income, so you must plan accordingly.

Which Cities in Ohio are Best for Foreign National Investing?

Ohio is often overshadowed by coastal states when it comes to international investing. However, this Midwestern state is home to a diverse economy, affordable housing market, and strong rental demand. Here are some Ohio cities to consider:

Columbus: Ohio's capital city is experiencing rapid growth, driven by a thriving tech scene and a growing population. Its strong job market and diverse economy make it a solid investment choice.
Cincinnati: Known for its historic charm and riverfront views, Cincinnati offers a mix of urban living and suburban tranquility. The city is home to several Fortune 500 companies, and its steady job market and affordable housing options make it a hotspot for investors.
Cleveland: Despite its past challenges, Cleveland has undergone a revitalization, with investments in its downtown area and cultural amenities. Cleveland was recently named America’s second-best city to start a career, and the city’s affordability and strong rental demand make it an interesting prospect. ‍
Toledo: As a manufacturing hub with a lower cost of living compared to other Ohio cities, Toledo presents opportunities for investors seeking stable rental income.

Types of Mortgages Available for Foreign Nationals in Ohio

Foreign nationals can access a variety of mortgage products, each with its own benefits:

DSCR Loan: Debt service coverage ratio (DSCR) loans make it easier for foreign investors to buy US rental properties. Unlike traditional mortgages that heavily rely on a borrower's personal income and credit, DSCR loans focus on the property's ability to generate income. By focusing on the property's income-generating potential rather than the investor's personal finances, DSCR loans eliminate the traditional hurdles often faced by international buyers. Waltz specializes in DSCR loans for foreign investors. Contact us to get started.
Non-Resident Conventional Loan: These loans offer competitive rates but typically require a higher down payment (often 30% or more) and may not require a U.S. credit history.
ITIN Loan (for certain non-residents): This program allows qualified borrowers to use an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. It often has down payment requirements around 30% and may have specific requirements for employment and income verification.
Jumbo Loan (for high-value properties): Jumbo loans are for mortgages that exceed $766,000, and sometimes over $1 million. These programs are more exclusive and cater to foreign investors with substantial assets and strong financial profiles.
Hard Money Loan: This is a short-term option from private lenders. It can be useful for quick closings but comes with higher interest rates and stricter terms.

Process of Refinancing for Foreign Nationals in Ohio

For foreign nationals living and investing in Ohio, refinancing your real estate investments in locations like Columbus, Cleveland, and Cincinnati means carefully replacing your current mortgage with a new one. This means taking out a mortgage to use the equity in your properties to fund new investments. This is why Waltz offers comprehensive and effective solutions to ease this process as we understand its crucial importance to Ohio real estate investors!

The refinancing process for foreign nationals generally involves:

Determining your property's current market value
Exploring different loan terms and interest rates to find the best deal
Preparing financial documents, including income verification and property ownership proof
Completing the application process
Once approved, finalizing the refinancing transaction

At Waltz, we recognize the significance of this process for real estate investors in Ohio and offer seamless solutions to optimize your investment strategies.

Ohio Refinancing Choices for Foreign National Mortgages

Rate-and-term refinance

This option can be quite interesting for foreigners looking to invest in Ohio real estate because it allows you to adjust the terms of your current mortgage— with the potential that it can result in a better deal on your house loan.

Cash-out refinance

At Waltz, we proudly offer this refinancing option to Ohio foreign investors as it allows you to access your property's equity— allowing you to borrow more than the current mortgage balance (based on the original equity).

For those interested in Ohio real estate investments, the additional funds can be utilized for various personal objectives, such as home upgrades, debt consolidation, or a down payment on another property. This provides you with cash at closing for a range of needs, broadening your Ohio investment opportunities while leveraging the best foreign national mortgages the state has to offer.

Tax Considerations for Foreign Nationals with Ohio Real Estate Investments

Seeking advice from a tax expert is always a smart move. Please note, this does not constitute legal or tax advice. Understanding the tax implications of owning Ohio real estate is crucial for foreign investors. Key tax considerations include:

Property Taxes: Ohio imposes property taxes on real estate ownership, which can vary depending on the property's location and value.
Income Tax: Ohio has a state income tax, which applies to rental income generated from your Ohio property.
Federal Income Tax: Rental income from your Ohio property is also subject to federal income tax.

Foreign Investment in Real Property Tax Act (FIRPTA): If you sell your Ohio property, you may be subject to FIRPTA withholding, which requires a portion of the sale proceeds to be withheld for potential U.S. capital gains taxes.

Waltz is Your Partner in Ohio Real Estate Investment

Waltz is dedicated to helping foreign nationals achieve their Ohio real estate investment goals. Our expertise in foreign national mortgages, combined with our in-depth knowledge of the local market, empowers us to provide tailored solutions. We offer comprehensive support throughout the entire Ohio investment process, including:

Our Mortgage comes with an Investor Kit that simplifies the process in just a few clicks.

LLC Formation Tailored for You: We'll establish an Ohio Limited Liability Company (LLC) that aligns with your specific investment objectives. This protects your personal assets while ensuring compliance with Ohio laws.
EIN Secured: We'll obtain an Employer Identification Number (EIN) for your LLC, essential for opening a bank account and managing your property finances.²
Operating Agreement Made Easy: In just 20 minutes, we'll handle the creation of your operating agreement, outlining ownership and management within your Ohio LLC.

Plus, after purchasing your Investor Kit, Waltz offers loans with up to 70% Loan-to-Value (LTV).³ You'll also have the opportunity to open a U.S.-based bank account through Waltz to manage your property's finances.