Buffalo/Rochester/Sycruse New York

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topcat

New Member
Hi

I thought i'd contribute to the Buffalo Property Investment blog as I just got back from there (yesterday in fact). I have been investing in property for about 8 years now and have not found anywhere else that gives me a better return than WNY (if anyone can give me 15 to 20% net then i'm all ears). You will see a lot of figues stating 30% but this is gross remember and the sourcing companies leave a lot out!

Buffalo is most definatey on the up as just in the last 12 months alone i've seen a lot more investment in the city and a lot more people moving into the it (always a good sign in my book). The property prices have stayed the same for for a number of years now and when I got into buffalo properties i wasn't too bothered about capital gain because my rental yield certainly made up for it. I feel with whats happening to buffalo I may even see a 10 or 20% capital increase over the next few years which would be nice.

What is paramount when inveesting in areas where you don't live is that you have a good team in the area. I have a good set of guys over there (by the way i'm british) that look after everything I ask them to, but it took me many visits and phone calls to get these people and they are worth their weight in gold. There are plenty of crooks willing to make a few quid out of your niaveness and I too have been burnt in the past and lost a few grand on my first purchase (a costly but important lesson). My advice to anyone going into this high gains area is that its high gains for a reason. You need to know the area and its sub towns and streets. One street can be desirable but presuming the streets around it are is a beginners mistakem as one block away can be crackhead city. I've seen a few buyers buy because it as sold with the fact it was near a good area!

My experience is at first it's a frustrating investment as the paper work can be tiresome, but this game is all about making money and that is what it certainly does. The real bargains are the ones you don't see advertised and it takes a while to get those. I hate to see people lose money due to lack of advice so If anyone would like any help or advice on investing in Buffalo/Niagara Falls and it's surrounding areas then contact me and i'll be glad to.

It's an old saying but its true, "It's not what you know, its who you know".
 
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paterson00

New Member
I am interested in the area and any tips that you could give me would be great.
 
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trophy

New Member
usa tax identification number

Hi,

I have bought a couple of properties in Buffalo.
The property manager has asked for my social security number as he has rented it to a S8 tenant.
I am going to give him my national insurance number (as I am british) and will be paying tax in the UK. Will that be OK?

Brennan property advised that I didn't need to obtain a tax identification number for the IRS to get the rent paid into my bank account from a housing benefit/S8 tenant.
Can anyone advise or anyone had any experience?

Thanks.
 
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Sunnyshores

New Member
Hi Trophy
I dont know why Brennans said you didnt need a ITIN, I have had conversations with them (Karen) telling them I wasnt getting any help from the US agents (ABC) on this matter.

As I understand it if you have a section 8 tennat and therfore are getting paid by the State, then they want to make sure 1. who they are paying and 2. that you pay them any income tax that may be due from your rental 'buisness'.

So, either they pay you (to an identified ITIN),or they ask the agent to withhold 40% (maybe 30%?) of the rent for tax. Any surplus would be paid back after you submit your first US tax return and get an ITIN.

Witholding such a large percentage is not good for you, as with deductions (expenditure) your profits and eventual tax bill will not be this high.

Therfore you need to get an ITIN quickly and avoid witholding taxes.


This is where I am at. You need to fill in a form asking IRS for a ITIN before the normal tax year end (December). With this form you need to send a copy of the deed of purchase and a letter from your rental agent saying you have Section 8 tenants (this is what I've been trying to get from ABC).

I'll paste on another post the IRS letter I have about where/how to obtain ITIN.
 
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Sunnyshores

New Member
Letter from IRS in London about how to obtain an ITIN - my additions in red:

To: ITIN Applicant
From: Taxpayer Services
Subject: ITIN Process

You have asked how to obtain an ITIN (Individual Taxpayer Identification Number). ITINs are issued for US tax purposes only and are not used for immigration. The application you need to use is a form W-7, which can be found on the IRS website at Internal Revenue Service.

There are instructions with the application form, but I find that Publication 1915, Individual Taxpayer Identification Number, more helpful if the instructions don’t have enough information.

Please note: Applications for ITINs are rejected most frequently for one of two reasons: lack of proper documentation for the “exceptions” and unacceptable identity document notarization.

• Regulations require that you submit your W-7 with your completed tax return. If you cannot do this, you must be eligible for one of the “exceptions” as listed in the instructions. rental income
You will need to submit the proper documentation listed in the instructions with your W-7 to show you meet the requirements for the “exception.”ownership deed and letter from rental agent

• Your identification documents (your passport is the preferred document) must be notarized by a U.S. notary or by a foreign notary with an apostille attached. U.S. embassies provide notarial services. If you are near an embassy that has an IRS office (London, Frankfurt, or Paris) we can certify your original document at no cost to you. You can bring your completed W-7 form, supporting documents, and passport into our office where we will certify your passport and send your application to the U.S. for processing. Alternately, you can post them to us by “recorded mail” and we will return your passport within one week by “recorded” mail. There is no charge for this service. Of course, if you are in the U.S. you can have a copy of your documents notarized there.

After we receive your completed form and documents, we will forward them to Austin, Texas, where they will be processed. They will notify you by mail if they need more information and will send you your number when it is assigned. At present, the process can take up to 12 weeks. If you have not heard from Austin after 12 weeks, you can contact our office and we can look in to the matter for you.

If you have any questions, please contact us. Our opening hours, telephone/fax numbers, and address can be found on our webpage at: Embassy of the U.S. London: Internal Revenue Service . Our e-mail address is [email protected]. This page is updated frequently.
 
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trophy

New Member
Thanks for all that useful information.
What I don't understand is that British citizens who will be paying tax on their USA income in the UK still apparently need to go through this process--considering there is a double taxation treaty.

As my property is being rented out in the next 2 weeks, this presumably means that my property manager will have to withold about 30% or 40% of the rent paid by the government, whereas the remainder of the rent paid by the tenant will not be subject to witholding by the property manager.

This witholding will continue until taxes are filed either in the UK or the USA and an ITIN is allocated.
Is that correct?
Might be a good time to consider setting up an offshore trust!
 
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Sunnyshores

New Member
Trophy, who is your property management agent ?

Your understanding is as mine is, apart from I think the Agency has to withold x% of all your rental income. Actually that must be true as they are supposed to withold % of all rent whoever your tenant is. Its just that in practise the IRS would never know unless its S8, so they dont tend to bother.

I dont understand your double taxation comment:
IRS want tax from all people making any income from work/assets in their country, so they need to 'identify' all people with a SSN or ITIN. So, you owe USA tax (tax year ends December, you pay in April).

The UK then wants to tax all UK citizens whereever and however they earn their money. So, you owe UK tax.

Luckily, there is this agreement where you can deduct the amoutn paid in US taxes from the UK amounts owed - thus the total you are paying is whatever is the highest tax in UK or US.

I'll hunt out other emails I have from IRS with details on and post later.

PS you also have to file a New York State annual tax return, I havent many details of this yet.
 
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Sunnyshores

New Member
My email to IRS 9 June 2008

I was intending to file a 2008 return, however there appears to be a minimum gross amount (for a single under 65 in 2007 $8750) whereby a return is not necessary.

As my property was only brought mid year and income is shared between 2 of us, then I believe each of us will earn under that amount.

Does this mean we complete NO return, or a modified one, or just notify IRS of one for next year?

Also with regard to requesting an ITIN, my US rental agent told me I needed one to rent to Section 8 tenants. However I have looked at the exceptions on the ITIN form and this is not mentioned.

I'd be grateful for your advice.


IRS reply 10th June 2008

You do not need to file a return if your US income is under the minimum amount.

You will need to request an ITIN for your rental property regardless of renting to Section 8 tenants. Please see Pub 1916 to see which exceptions you qualify for (e.g. mortgage payments or receiving rental income).
 
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Sunnyshores

New Member
http://www.tax.state.ny.us/

My email to NYState about annual returns 21 July 2008

As a non resident UK citizen with only rental income from NYS, what forms would I have to file?

Is there a miunimum amount earnt per year, below which I would not have to file?

Reply dated 21 July 2008


You do not need ot file a return if your New York adjusted gross income federal amount column (Form IT-203, Nonresident and Part-Year Resident Income Tax Return, line 31) is less than $7,500?
 
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trophy

New Member
Thanks,
This is how I understand it.

$8,750 pa means no form needs to be filed to the IRS for federal income tax purposes.
If the gross amount is under $7,500 then no need to file a NY state income tax return.

But you still need to apply for an ITIN irrespective of whether it is a section 8 tenant or person who is not on benefits?
So assuming you don't have an ITIN number you must have to complete some IRS form in order to get the witheld amount paid to you?

My property manager is an individual--not part of or working for a company.
 
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Sunnyshores

New Member
So assuming you don't have an ITIN number you must have to complete some IRS form in order to get the witheld amount paid to you?.
I see what you mean, no filing to IRS if under the minimum earning means no possibility to declare the witheld tax and ask for it back . . .. yes that would seem to be the implication. Hadnt considered that.

Perhaps if they have witheld tax then you have to file a return however much you've earnt ? The email for IRS London is [email protected], they should be able to answer that one. I'm not in this situation at present.

If you want various IRS publications covering rentals send me a PM and I will email the PDF files to you.

I am suprised that others arent asking these questions. I did a few months ago and no-one replied, so I'm not sure how others are filing returns;)
Brenans recommended an accountant to me to do the Federal and State Returns , I compared him to several other recommendations and I was happy with his service and price. He charged $500-$700 for completing 2 federal and 2 state returns (me and my partners) which covered 2 rental properties.
 
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Sunnyshores

New Member
Just in case anyone was following this I went to the IRS in London Embassy this week and they sent off my ITIN application, and certified passports free of charge. ITIN expected 9-12 weeks.

Anyone have any tax updates ? We are supposed to be filing in December!
 
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Devonish

New Member
US Bank account needed?

Thanks for all the interestng information on this thread. I am in the process (beginning) of buying some Buffalo property but was told I need to set up a US bank account. I was also told that HSBC were best for this as they have so many branches across the world. I needed to set up a UK bank account with them before I could apply for a US one. I am now told that their are 2. A foreign currency account which you just tack onto your UK account or a full blown US bank account where you get a cheque book and cards. Any ideas on which one I would need, they dont seem to know at HSBC. :confused:
 
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Sunnyshores

New Member
Devonish - Id be interested to know what you get from HSBC. I was told as I had a 'business' I needed a business account which cost £40 a month and didnt include internet access.
I went with Citibank in the end, they are free and I got a cheque book and debit card and internet access. But I wouldnt recommend them either as its complicated to pay cheques in or make payments yourself on-line and their customer services are a nightmare.
I havent actually used my cheque book yet so perhaps that isnt necessary, I get the rental agents to wire payments straight into my account. I pay bills from my bank online (ie buildres) or the agents pay them for me or I use my debit card for US taxes online.
 
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wwhite

New Member
I am very much interested in this area to invest in. I live in the UK and wish to aquire property in the United States. Does anyone have a uselful step by step as to what requirements by the USA government desire and how does an international with no credit history in the USA go about owning a property. Many thanks
 
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