Investing in Arizona property from Taiwan
What you’ll run into moving from Taiwan to Arizona, explained step by step, with the original English terms and sources. This is general information, not legal, tax or mortgage advice; check with a licensed professional before you sign.
You can buy an Arizona rental entirely from Taiwan, but the real return is what’s left after taxes, insurance, HOA, property management and vacancy. Here it is in order, with a calculator at the end.
Step by step: investing in Arizona from Taiwan
- 1Set your goalRental income, appreciation, or living there in a few years? Your goal decides the area: near the campus, demand from employee renters is higher; new homes need little maintenance for the first few years.
- 2Get an ITIN and open a US accountInvestors without an SSN (Social Security number) need an ITIN (an IRS tax ID) to file taxes; running rent, mortgage and taxes through a US account keeps things simple.Source: IRS
- 3Decide how to payCash is simplest; foreign national loans commonly need 25–40% down at higher rates; you can also look at DSCR loans (approved on whether the rent covers the mortgage).
- 4Decide how to hold titlePersonal name, LLC or trust: liability, taxes and estate planning all differ. Decide before closing; changing it later costs money.
- 5Pick a property, inspect, appraiseJudge the price by recent sales; in the inspection, look closely at the AC unit, roof and plumbing; estimate rent conservatively rather than taking the seller’s or agent’s top figure.
- 6ClosingSame as buying a home to live in: escrow and title insurance. Documents can be signed remotely; some need notarizing.
- 7Hire a property manager and rent it outA property management company finds tenants, collects rent and handles repairs. Read the contract: management fee, leasing fee, the repair amount above which they must ask you first, and how to cancel.
- 8File taxes every yearUS federal (1040-NR for nonresidents), Arizona state tax, and overseas income in Taiwan. Find an accountant who knows both US and Taiwan taxes.
Working out returns: gross yield isn’t what you take home
| Rent per year (minus 5% vacancy) | $27,930 |
| − Property tax | $2,880 |
| − Insurance | $1,500 |
| − HOA | $1,080 |
| − Management fee | $2,514 |
| − Maintenance | $4,800 |
| Net income per year | $15,156 |
A 6.1% gross yield drops to 3.2% after costs, a gap of 3.0 percentage points.
Assumes an all-cash purchase; excludes mortgage interest, income tax and exchange rates. Management fees are commonly 8–10% of rent, plus about half a month to one month’s rent for placing a tenant. Defaults are typical market rates, not quotes.
Taxes: what owners who don’t live in the US should know
| Item | Key points |
|---|---|
| 30% withholding on rent | By default, the payer (usually the property manager) must withhold 30% of a nonresident’s gross rent for the IRS. |
| Elect net-basis filing | You can elect to treat rent as income from a US trade or business: give the property manager a W-8ECI and file a 1040-NR each year, so you’re taxed only after expenses and depreciation. Most rental investors choose this. |
| Depreciation | A residential rental building (not the land) can be depreciated over 27.5 years, lowering taxable income each year; depreciation taken is recaptured and taxed when you sell. |
| Arizona state tax | State income tax is a flat 2.5%; nonresidents file Form 140NR. City transaction privilege tax (TPT) on long-term residential rentals (30+ consecutive days) was abolished from 2025; short-term rentals still pay it. |
| Selling | When a foreign person sells, the buyer generally must withhold 15% of the price (FIRPTA), settled up when you file. If the buyer will live in the home, there’s no withholding at US$300,000 or less, and 10% from US$300,000 to US$1 million. |
| Estate tax | If a non-US resident’s US assets exceed US$60,000, a US estate tax return (Form 706-NA) is required at death, and the available credit is far lower than for US residents. Plan how you hold title first. |
| Taiwan | If a household’s (you, your spouse and dependents) combined overseas income reaches NT$1 million or more, all of it goes into the basic income amount; basic tax is only calculated when the basic income amount exceeds NT$7.5 million. US taxes paid can be credited within limits. |
Financing and ownership
Fastest and best for negotiating, with no foreign national loan requirements; but all your money is tied up in one property.
No US credit score needed; based on passport, income and savings. Down payments are commonly 25–40%, at higher rates than a regular mortgage.
Based on whether the property’s rent covers the mortgage (e.g. rent ÷ mortgage payment ≥ 1.0–1.25), with less weight on personal income; higher rates.
Simplest, with the most loan options; liability and the estate stay with you personally.
Mainly used to shield you from rental liability; loans may be harder to get. It doesn’t necessarily help with estate tax for nonresidents.
Sometimes used for estate tax planning, with higher costs and more complex filing. Always decide with an accountant and a lawyer.
Rules for renting out
- Deposit cap：The deposit plus prepaid rent generally can’t exceed 1.5 months’ rent in total (A.R.S. § 33-1321).
- Short-term rentals (Airbnb)：State law bars cities from banning them outright (A.R.S. § 9-500.39), but Phoenix and other cities require a permit, and short-term rentals also owe TPT. Many HOA rules restrict or ban short-term rentals, so read the CC&Rs before you buy.
- Fair housing：You can’t choose tenants based on race, national origin, religion, familial status, and so on. Property managers must screen by the rules.
- Renting to campus employees：Relocated employees often use a company employment letter instead of a US credit report. Whether to accept it is up to you and your property manager.
Risks: don’t just listen to “prices always go up”
Thousands of rental homes near the fab are being completed or planned, and the new supply may push rents down.
Most tenants come from the same campus. If the fab schedule slips, demand changes with it.
Rent and home prices are in US dollars, so the exchange rate when you convert back to NT dollars affects your real return.
Air conditioning is a must, and it has to be fixed right away when it breaks. For older homes, estimate the cost of replacing the AC unit and roof first.
Sources: IRS (Publication 519, Form W-8ECI, 1040-NR, FIRPTA exceptions, 706-NA), Arizona Department of Revenue, A.R.S. § 33-1321, A.R.S. § 9-500.39, Taiwan Ministry of Finance (basic income). This is general information, not tax or investment advice; for how to hold title and file taxes, see a licensed accountant and lawyer. Partners
Glossary
| HOA | Homeowners Association. Collects monthly dues and sets community rules, such as exterior paint colors, parking, and where trash bins go. |
|---|---|
| SPDS | Seller Property Disclosure Statement. The seller must disclose known problems with the home, such as leaks, termites, and repair history. |
| BINSR | The repair request after inspection (Buyer’s Inspection Notice and Seller’s Response). The buyer lists requests, and the seller replies whether they’ll fix each one. |
| Security deposit | Under Arizona law, the deposit plus prepaid rent generally can’t exceed 1.5 months’ rent in total (A.R.S. § 33-1321). After you move out and request it, the landlord must return it within 14 days (excluding weekends and legal holidays) with an itemized list of deductions. |
| Earnest money | A good-faith deposit the buyer pays once the offer is accepted. It’s held by a third-party escrow/title company and credited toward the price at closing. Commonly about 1–2% of the price. |
| Escrow | A neutral third party (an escrow/title company) holds the money and documents, and only transfers title and releases funds once all conditions are met. |
| Pre-approval | Loan pre-approval. After reviewing your income and assets, the lender gives you a letter stating how much you can borrow, which you attach to your offer. |
| CC&Rs | The HOA’s community rules, spelling out what you can and can’t do, such as exterior changes, parking, and rental limits. Read them before you buy. |
| Closing costs | Costs of closing, including loan fees, title insurance, escrow fees, and more; the down payment isn’t included. |
| ITIN | A number the IRS issues for tax filing to people without an SSN. Investors need it to report rental income and home sales. |
| DSCR loan | An investment loan approved based on whether the property’s rent can cover the mortgage (Debt Service Coverage Ratio). Personal income matters less, and rates are higher. |
| W-8ECI | A form nonresidents give their property manager stating rent will be reported on a net basis, so the manager doesn’t have to withhold 30% of gross rent. |
| Depreciation | The building portion (not the land) of a residential rental can be expensed over 27.5 years, lowering taxable income each year; it’s recaptured and taxed when you sell. |
| LLC | Limited liability company. Often used to hold rental homes and shield you from liability; decide on tax and estate planning with an accountant and a lawyer. |