Just wondering if there are Canadian REI's here that own rental property in the states? Would you recommend this route? What has been your experience?
There are lots of Canadians investing in US.
I am from Winnipeg, Manitoba.
Few things that you may want to know before hand.
1) know your tax(both US & CDN) situation, so you can set up the right entity to avoid double taxation & asset protection.
2) have a strong team( contractor, property manager,RE lawyer, RE agents..) on ground.
3) set up proper banking for the ease of future banking transactions.
4) choose your market; really understand your market.
5) know the state/city law that you're going to invest in.
6) make connection with local investors (BP is an excellent source for connection & resources.)
What I find out.
Price of most Canada RE is priced a lot higher than some states for the past 4-5 years. So the return in much higher.
It's not as easy as you deal within your backyard, it's a long distance investment.
Also you are learning a totally new market, so you have to adapt to the local pricing & thinking.
The principle of investment are the same though.
I enjoyed it myself, it's a challenge.
I just find that the price gap between properties in Canada (especially Alberta) compared to properties with similar rental incomes in the states is huge. I live in a college town with almost no vacancies and rent rates aren't even close to the 2 percent rule. Even the most run down SFH's run around 200k. With aged half duplexes priced in the high 100's.
I know of many Canadians are taking advantage of the combination of low interest rate & double digit return cash on cash; has bought into US market.
2% is not easy to get in most areas of US market(depending on market & area). 1% is not even easy in war zone area in Canada( although war zone area in Canada is mickey mouse to US). I heard Americans laughed at our crime rate.
So watch out to the area you are going to invest, know the area.
Lots of good things to consider. Thanks!
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