Canada vs. US - Where is it better to invest?

Is Canada becoming a better place to invest in buy-and-hold real estate for US citizens/ residents? Considering the accelerating drop in the US dollar's value, Canada may seems attractive. However, when it comes to taxes (1031 exchange, etc. ) and other laws, it may not be that attractive at all. Your thoughts...

Edited: 06/26/2010 at 10:23AM

Steve L.

SFR Investor · Rancho Cucamonga, California

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Icon_minipost Nov 04 '09, 06:35 AM

This is an easy answer. I grew up in Canada and moved to California primarily because I wanted to get into real estate/business.

Canada is not near as business friendly compared to the US (even in comparison to socialist California).

Real Estate laws are also very different. Mortgage Interest is not a tax deductible so most Canadians dream is to pay off their house. Whereas; many Americans want to the "tax benefits" of a mortgage. Also no such thing as a 1031 exchange.

They also do not have near the housing bubble US has suffered. Canada banks are much more conservative so buyers had to have a down payment, etc etc.

USA is on sale much more than Canada is right now. I am sure there is opportunity in California, but not the same as here.

Edited: 06/26/2010 at 10:23AM by Steve L.

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Nov 04 '09, 07:33 AM

Originally posted by Steve L.

Real Estate laws are also very different. Mortgage Interest is not a tax deductible so most Canadians dream is to pay off their house. Whereas; many Americans want to the "tax benefits" of a mortgage.

Interesting that you put the tax benefits in quotations. One can argue that the tax deduction of mortgage interest is more of a curse than a blessing. The conspiracy theorists would argue that it was created so people would borrow more and thus make the banks more powerful.

Edited: 06/26/2010 at 10:23AM

P NW

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Icon_minipost Nov 05 '09, 12:28 AM

I know that from talking to other landlords that the landlord tenant laws in some parts of Canada can be difficult to work with. That can have a pretty big effect on buy and hold investors.

On the plus side for Canada, the economy and real estate both seem to be more stable. I am very fond of the Vancouver area; it's quite beautiful and seems prosperous.

Real estate in the USA is currently on sale. It is a good time to buy for buy and hold investors. Real estate always goes in cycles, and if you can buy at the bottom of a cycle, it's a good thing.

Edited: 06/26/2010 at 10:23AM

P NW

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Icon_minipost Nov 05 '09, 12:31 AM

I saw a list of new, newly redecorated, and up and coming ski resorts in Canada. For long term, they might be worth looking into. The list was in a ski magazine at the Dr's office, so sorry, don't have any more information about it, but it should be easy enough to google.

Edited: 06/26/2010 at 10:23AM

Tim W.

Real Estate Investor · Indiana, Indiana

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Icon_minipost Nov 05 '09, 05:06 AM

Always seems to be Canadians coming on here to learn about investing in the US, not the other way around. I would look at the Canadian dollar for FOREX trading but not real estate. The US leadership has and continues to screw up and while it kills the dollar, it makes great REI deals. So in a way I would ideally find a way to use rising Canadian dollars to buy undervalued US real estate. Triage it baby.

Edited: 06/26/2010 at 10:24AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Nov 05 '09, 05:15 AM

Originally posted by Tim Wieneke

Always seems to be Canadians coming on here to learn about investing in the US, not the other way around. I would look at the Canadian dollar for FOREX trading but not real estate. The US leadership has and continues to screw up and while it kills the dollar, it makes great REI deals. So in a way I would ideally find a way to use rising Canadian dollars to buy undervalued US real estate. Triage it baby.

Well, if you had Canadian income real estate, you could have your Canadian $. Anyway, I watch a lot of HGTV (Just to satisfy my feminine side...) and there is one show about this guy who shows home owner how to turn their basement into a rental unit. (He does a great job, by the way) Those basements bring lots of doe...

Edited: 06/26/2010 at 10:24AM

Josh Keys

Accountant · Sydey, NSW

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Icon_minipost Feb 27 '10, 10:52 AM

Originally posted by Tim Wieneke

Always seems to be Canadians coming on here to learn about investing in the US, not the other way around. I would look at the Canadian dollar for FOREX trading but not real estate. The US leadership has and continues to screw up and while it kills the dollar, it makes great REI deals. So in a way I would ideally find a way to use rising Canadian dollars to buy undervalued US real estate. Triage it baby.

Agree with this. I have heard that property prices in Canada (like oz where I live), generally make buy and hold investing expensive less profitable. Hence the need to look at a market with bargin basement property prices!

Note I said generally - im sure there are good buy and holds in Canada, they are probaly just tougher to find than in the US.

Edited: 06/26/2010 at 11:51AM

Account Closed

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Icon_minipost Feb 27 '10, 01:51 PM

Problem with real estate in canada is getting the moose droppings out of the carpets. You also have to watch out for holes in the walls from those drunken indoor hockey games in the living room.

So take off ay!

TC

Edited: 06/26/2010 at 11:51AM by Account Closed

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Feb 28 '10, 12:56 AM

Wow, Tom. That sound almost hostile... You forgot to add:
"U.S.A.!! U.S.A.!! U.S.A.!!"

Edited: 06/26/2010 at 11:51AM

Account Closed

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Icon_minipost Feb 28 '10, 01:41 AM

Eddie,

Remember the old saying: If you don't get the joke, then the joke is ON YOU!

TC

Edited: 06/26/2010 at 11:51AM by Account Closed