Published on and written by Cyril Jarnias
For an executive already well exposed to the French and European economy, real estate in the United States is no longer just a yield opportunity. It has become a tool for global diversification, asset protection, and wealth optimization, provided one masters a legal, tax, and regulatory environment much more sophisticated than it appears.
U.S. real estate offers much more than simple seasonal rentals: it allows securing wealth in foreign currency, protecting assets from creditors, facilitating international succession, or generating dollar-denominated income with a view to geopolitical diversification.
Why U.S. Real Estate Attracts Executives’ Wealth
To understand the role of U.S. real estate in a diversification strategy, one must first move beyond a binary “France vs. USA” comparison and reason in terms of risk/return profile, taxation, and legal security.
U.S. real estate offers several structural advantages that directly appeal to an executive accustomed to risk management:
Approximately 40 million Americans move each year, fueling rental demand and land value appreciation.
A Yield Differential Hard to Ignore
Available land data clearly illustrate the yield contrast between the United States and major developed markets. In the land segment alone, average profitability ranges are striking:
| Country | Average Land Yield | Average Entry Ticket | Estimated Overall Taxation | Land Market Liquidity | Regulatory Barriers |
|---|---|---|---|---|---|
| USA | 12–25% | $50,000 – $150,000 | 15–30% | Very High | Low |
| France | 3–6% | €80,000 – €200,000 | 19–45% | Medium | High |
| Germany | 4–7% | €100,000 – €250,000 | 26–45% | Medium | High |
| Switzerland | 2–4% | CHF 200,000 – 500,000 | 20–35% | Low | Very High |
| Canada | 8–15% | CAD 60,000 – 180,000 | 20–35% | High | Medium |
For an executive used to capped returns from certain European vehicles (e.g., SCPIs frequently stuck around 3–5%), access to prospects of 12–25% on certain U.S. land asset classes completely changes the diversification equation—provided they accept higher market risk and regulatory complexity.
Geographic, Sectoral… and Currency Diversification
On a macro level, U.S. real estate offers three types of diversification particularly sought after by high-net-worth individuals:
Investing in U.S. real estate enables triple diversification: geographic (exposure to an economy less correlated with Europe), sectoral (access through REITs and ETFs to growth sectors like data centers, healthcare, telecom, self-storage, or logistics, supported by structural trends), and currency (building a stock of hard assets in dollars, beneficial for an executive whose cash flows are mostly in euros).
In an environment where the euro has remained relatively weak against the dollar since 2022, this currency diversification works both ways. An investor in Swiss francs in a Swiss real estate fund, for example, accumulated 4.45% real estate return and 4.2% currency appreciation against the dollar over a recent period, totaling 8.65% before fees. Conversely, for a French executive, the strength of the dollar makes entry into the U.S. market more expensive but offers natural hedging should the euro depreciate further.
Understanding the U.S. Asset Protection Arsenal
One of the most underestimated advantages of U.S. real estate for an executive lies in the sophistication of asset protection tools, widely integrated into the practices of the wealthiest local investors.
The Basic Logic: Separate, Stack, Anonymize
The American asset protection philosophy is based on a legal truism: what is not in your personal name is harder to seize. Hence a recurring triptych in the structures of major real estate investors:
– legal separation of assets through distinct entities (LLCs, limited partnerships, foundations, trusts);
– layering (multi-entity structuring) to multiply barriers between personal wealth and potential claims from creditors or plaintiffs;
– anonymization of apparent ownership in public records, through anonymous land trusts or LLCs in states offering strong confidentiality.
The recommended practice, for example, is to hold each property in a separate LLC, then group these LLCs under a holding company (LLC or Family Limited Partnership), itself held by one or more irrevocable trusts. This three-tier structure has become a standard among ultra-high-net-worth individuals.
| Level | Typical Vehicle | Primary Role |
|---|---|---|
| 1 – Asset | Single-asset LLC | Risk compartmentalization per property |
| 2 – Holding | LLC or Family Limited P. | Centralized management, valuation discount, gradual transfer to heirs |
| 3 – Summit | Irrevocable Trust(s) | Removal of asset from taxable estate, ultimate creditor protection |
Each layer adds a function: liability isolation (Level 1), tax optimization and succession (Level 2), long-term asset protection and removal from personal estate (Level 3).
LLC, Land Trust, FLP, Foundation: Why These Acronyms Matter to an Executive
For an owner-executive accustomed to French SCIs, U.S. tools may seem esoteric. Yet they respond to very similar logics: separating economic ownership, control, and risk exposure.
Holding rental properties in the United States can involve several structures: an LLC (Limited Liability Company) offers limited liability and costs $500 to $1,000 to set up, with annual fees of $100 to $300; an anonymous land trust paired with an LLC combines discretion and protection; a Family Limited Partnership (FLP) allows gradual asset transfers with tax discounts; and a U.S. foundation suits large estates for optimized protection and multi-generational succession.
Added to these are provisions specific to primary residences, such as homestead exemptions: in many states, part (or even all) of the net equity in a primary residence is protected from creditors and may benefit from local tax relief.
Domestic and Offshore Trusts: The “Bunker Layer”
Trusts, particularly irrevocable trusts, constitute the most difficult protection layer to pierce. Two broad categories are used by high-net-worth individuals investing in real estate:
Asset protection trusts, whether domestic (DAPT) in certain U.S. states or offshore in jurisdictions like the Cook Islands, Nevis, or Belize, allow the settlor to be a beneficiary while making assets difficult for creditors to reach, as offshore jurisdictions do not recognize U.S. judgments.
Properly structured, these trusts remove real estate assets from the taxable estate and place them beyond the reach of lawsuits, while allowing the executive and family to continue benefiting from them through distributions or enjoyment.
For a French executive accustomed to distrust of trusts (not recognized in civil law and subject to heavy reporting obligations), placing part of their real estate portfolio in a legal environment that values trusts enables diversification not only of assets but also of legal framework.
Investing Directly or Through the Stock Market: Two Ways to Play U.S. Real Estate
Then come two main access routes: direct investment in properties or land, and listed investment via REITs and real estate ETFs. Each has its role in the diversification of an executive’s wealth.
Direct Real Estate: From Land to Residential, Including Long-Term Rentals
In the physical market, the depth and granularity of the U.S. market allow the strategy to be very finely tailored to the desired risk profile.
Raw land, as seen, constitutes a full-fledged asset class, with average yields ranging from 12% to 25% depending on the segment, total taxation often between 15% and 30%, and liquidity described as “very high” compared to European markets. The entry ticket remains reasonable ($50,000 to $150,000 on average), well below what is frequently seen in Switzerland or Germany.
On the residential rental side, markets like Dallas (Texas) are cited as attractive entry points: a pro-business state with no income tax, strong demographic dynamics, and a growing long-term rental market. At the other end of the spectrum, niches like Wellington (Florida) target a hyper-specific clientele (equestrian world owners and professionals), offering a mix of prestige, long-term appreciation, and seasonal dollar cash flow.
Residential rental market analysis
What matters for an executive is not to “check” a trendy city, but to define their objective upfront: primary focus on current income, long-term capital gains, currency diversification, or a combination of all three. The choice of asset and legal structure follows from that.
REITs and Real Estate ETFs: The Liquid, Institutional Version
Alongside the physical brick, the universe of U.S. REITs plays a key role in the wealth diversification of high-income individuals. It currently benefits from a rather favorable context:
– REITs start 2026 with solid balance sheets, debt generally below historical averages, well-staggered maturities, and comfortable liquidity;
– they often trade at a discount to the net asset value (NAV) of their assets, while being considered “historically cheap” compared to the overall stock market and appraised values;
– FFO (Funds From Operations) growth is expected around 3% with an acceleration toward 6% in the medium term, close to the long-term average (5.4%).
REITs offer an income profile suited to executives seeking to stabilize their financial flows against the ups and downs of their business.
Distribution of consistent dividends, often quarterly, thanks to rents collected on real estate assets.
Less correlated with traditional economic cycles, REITs help offset irregularities in professional income.
– historically, approximately two-thirds of the total return of REITs comes from dividends, with a current yield around 4%;
– this regular income component cushions periods of stock market volatility;
– commercial leases, often multi-year, create predictable rental cash flows.
In terms of diversification, several figures are telling: the correlation of REITs with the U.S. stock market is around 0.56, and their correlation with Investment Grade bonds is close to 0.16. Integrating REITs into a multi-asset portfolio thus helps reduce overall risk while improving risk-adjusted returns.
Portfolio construction studies show, for example, that an allocation of 40% stocks, 40% bonds, and 20% REITs is more efficient than a classic 55% stocks / 35% bonds / 10% REITs portfolio, generating higher returns with lower volatility.
For an executive who does not wish to manage a portfolio of properties directly, REITs or real estate ETFs thus provide an effective way to expose part of their wealth to U.S. real estate while maintaining daily liquidity.
U.S. Taxation: What a Non-Resident Investor Must Understand
The power of the U.S. tax machine should not be underestimated. A non-resident executive remains subject to several distinct regimes, depending on whether they receive rents, realize capital gains, or sell real estate.
Rent, Capital Gains, Withholdings: The Combined Game of Federal Tax, FIRPTA, and States
A foreign investor who rents out a property in the United States must generally declare their rental income to federal tax authorities and pay the corresponding tax. These rents are classified as passive income (FDAP: Fixed, Determinable, Annual or Periodical) and are subject, by default, to a 30% withholding on the gross amount, unless modified by tax treaty.
Capital gains from the sale of U.S. real estate are also taxable in the United States, regardless of the seller’s country of residence. The classic distinction between short-term capital gains (held less than one year, taxed at ordinary rates up to 37%) and long-term capital gains (preferential rates of 0%, 15%, or 20%) applies.
FIRPTA imposes a 15% withholding on the gross sales price of U.S. real estate if the seller is foreign. This withholding is an advance payment of capital gains tax, not the final tax. The seller must file a U.S. tax return to calculate the exact tax and potentially recover part of the withholding. The buyer is responsible for applying this withholding; if they fail to do so, they may be held personally liable for the amount owed.
Added to this are state tax layers: most states also tax real estate capital gains and sometimes have specific withholding regimes for non-residents. The complexity does not justify giving up the U.S. market but requires working with tax professionals experienced with foreign investors.
Tax Treaties and Double Taxation: The Special Case of the French
France and the United States are bound by a tax treaty to avoid double taxation, and by a specific convention on inheritance and gift taxes. For a French executive or French tax resident, this means in practice:
Income and capital gains from a U.S. property can be taxable in both countries. Tax credits are possible in France for tax already paid in the United States. In general, U.S. real estate remains primarily taxable in the United States, especially for gains on sale.
U.S. real estate may also potentially fall within the scope of the French wealth tax (IFI) for a French tax resident, if the global net value of their real estate assets exceeds €1.3 million. Debt (e.g., a U.S. mortgage) however reduces the taxable base.
For a non-resident executive from France but still holding French real estate assets, the situation is reversed: France may tax the value of assets located on its territory, while U.S. taxation may apply to the total worldwide estate for a U.S. citizen or green card holder. The combination of the two systems makes geographic allocation arbitration even more strategic.
A More Political U.S. Regulatory Environment: The State Factor
Another reality an executive investing in U.S. real estate must grasp: the recent explosion of state laws restricting, to varying degrees, foreign ownership of land.
Approximately 36 states have adopted legislation limiting or regulating access by certain foreign profiles to specific categories of property (agricultural land, land near military installations, critical infrastructure). At least 22 states legislated in 2024, over 15 in 2023, and nearly 200 bills were filed in 2025.
These laws often target “countries of concern” (China, Russia, Iran, North Korea, Venezuela…) and may:
– impose outright bans on ownership for certain property types;
– require specific registrations and declarations;
– provide for sanctions up to forced divestiture in case of non-compliance.
For an executive from France or another non-targeted country, these laws do not mean market closure, but they add a mandatory due diligence level: check before each transaction the rules applicable in the relevant state, the nature of the target property, and any reporting obligations or limitations for the entities used (LLCs, partnerships, etc.).
Florida is a telling example: SB 264 strictly regulates land ownership by certain nationals of targeted countries, especially near military bases or on agricultural land. This type of legislation, upheld by federal courts, shows that legal risk is not only tax-related but also political.
Currency Risk Management and Local Financing: The Currency Dimension
For an executive outside the dollar zone, entering the U.S. real estate market means accepting significant USD exposure. This exposure can be passive or managed, depending on the strategy adopted.
Several approaches coexist among institutional investors and large private investors:
Three strategies exist: 1) active hedging via forwards, options, or swaps to lock in exchange rates on future cash flows; 2) natural hedging through dollar-denominated financing, aligning the currency of the asset and the debt; 3) currency diversification, assuming dollar exposure as part of the asset allocation.
Best practices observed among major international real estate investors include establishing clear hedging policies (what is hedged, what is not, with which instruments), systematic use of cash flow forecasts (stress-testing scenarios of currency depreciation or appreciation), and integrating the FX partner from the structuring phase of the transaction.
For an executive, even on a more modest volume, the logic remains the same: finance as much as possible in local currency to limit operational risk, and only expose to currency risk the equity flows you are willing to see fluctuate.
How U.S. Real Estate Fits into a Global Executive Portfolio
The fundamental question is not “should I invest in the United States?”, but “what specific role should U.S. real estate play in my overall wealth architecture?” For an executive, several functions stand out.
A Diversification Block of Limited but Targeted Size
Portfolio construction studies suggest that real estate, overall, should not exceed roughly 10 to 15% of a wealth portfolio, otherwise it risks rigidifying the allocation too much and concentrating risk.
Within this real estate block, allocating a significant fraction to the United States allows:
– reducing correlation with French and European real estate cycles;
– accessing market segments and yield levels unavailable in Europe (certain land, alternative segments supported by REITs, etc.);
– capturing part of the risk premium associated with the dollar.
To avoid a heavy, illiquid portfolio, an executive should not over-concentrate in direct residential real estate in both France and the United States. It is better to articulate a core of liquid U.S. REITs/real estate ETFs with a limited number of direct positions (one or two properties, a land pocket, or a private equity real estate vehicle) to combine yield, diversification, and flexibility.
A Tool for Family Strategy and International Succession
U.S. real estate can also be thought of as a linchpin of multi-continental family strategy. Combined with trusts (irrevocable, possibly DAPT or offshore trusts), a FLP, and LLCs, it offers ideal raw material for:
– organizing gradual transfers of interests to children, via discounted FLP or LLC interests;
– removing part of the real estate assets from the taxable base of wealth tax (ISF/IFI) or inheritance tax in certain jurisdictions, by housing them in foreign structures;
– protecting the estate against professional hazards (litigation, bankruptcy, divorce) while guaranteeing economic access to income (rents, REIT dividends).
This strategy must be reconciled with the domestic laws of the countries of residence (often hostile to trusts) and tax treaties. For an executive with children in multiple countries, holding U.S. assets in suitable structures offers considerable succession flexibility.
A Reservoir of Liquidity and Collateral for Other Projects
Finally, U.S. real estate, due to the depth of its mortgage market and the sophistication of its refinancing solutions (including asset-based equity release structures for non-residents), can serve as a “capital brick” that can be mobilized.
Specialized players structure refinancings based on the property value, loan-to-value (LTV) ratio, and exit strategy, rather than solely on the borrower’s income capacity. For an executive, this can allow:
– mobilizing part of the latent capital appreciation from a U.S. real estate portfolio to finance a transaction in their home country, an entrepreneurial project, or an equity stake;
– gradually rebalancing their real estate exposure without immediately triggering taxable sales;
– financing succession structures (trusts, foundations, international life insurance solutions) with capital extracted from real estate assets.
In this framework, U.S. real estate ceases to be merely an “investment” and becomes an element of the overall wealth treasury.
In Summary: A Powerful Tool, to Be Handled Like an Executive
U.S. real estate: what role in diversifying the wealth of an executive outside France? The answer, in light of the data and observed practices, is twofold.
On the financial side, U.S. real estate offers:
– returns far superior to what most European land markets offer, with ranges of 12–25% on land;
– an attractive risk/return profile via REITs, combining high dividends, healthy balance sheets, and valuation discounts;
– valuable geographic and currency diversification for a largely euro-centric portfolio.
On the legal and wealth side, it provides access to:
– a range of structures (LLCs, FLPs, domestic and offshore trusts, foundations) enabling asset protection and estate planning difficult to replicate in a purely French framework;
– confidentiality and compartmentalization mechanisms used by nearly all major U.S. real estate investors, and transferrable to a foreign executive with appropriate advice;
– refinancing and equity mobilization possibilities to serve other wealth projects.
Ignoring the tax, regulatory, and political complexity (FIRPTA, withholding taxes, tax treaties, state restrictions, U.S. reporting and filing obligations) would be a serious mistake, as it is illusory to navigate this maze alone.
For an executive outside France, the right approach is therefore to consider U.S. real estate not as an opportunistic purchase, but as a strategic block of their wealth allocation, limited in size (a few percentage points of total wealth), carefully diversified (direct + REITs), legally armored (multi-tier structures), and integrated into an international succession roadmap. This is the price for this asset class to fully play its role as a diversification pillar in a globalized executive’s wealth.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
