When you think about it, it really does make a lot of sense that Canadian citizens would be interested in buying U.S. property. The countries share one very long border, making it easy to travel back and forth. Americans and Canadians both speak English, making everything easier in general. And once the American economic recession really hit the country back in 2008, the U.S. dollar fell fast and has been taking a while to gain value back, while the Canadian dollar has remained stable and strong in comparison.
But as a Canadian financing an investment property or financing a second home in the States, you could run into some road bumps. There are plenty of mortgage lenders in the U.S. who help people with financing options, but most of these mortgage lenders make it difficult for foreign buyers to qualify for loans. Your second home financing options could become very limited, simply because you possess the leverage that American buyers have.
Furthermore, you’ll have to handle (and understand!) a whole new set of taxes — and in the U.S., there are a lot of taxes. If you’re just looking to invest in American property and you only intend to rent it out, keep in mind that you’ll probably have to pay both basic property taxes and renting taxes. Also related to this difficulty is the fact that you’ll be dealing with two different sets of currencies. Although they aren’t too different, there’s no way you’ll be able to make a smart investment in the U.S. if you don’t understand the currency.
These difficulties aren’t necessarily serious enough to deter Canadians from investing in U.S. property — in fact, tons of Canadians are able to successfully navigate the American real estate world by receiving help from mortgage lenders and financial advisers that specialize in foreign real estate investments.
So now we’re turning the conversation over to you — what do you think about investing in foreign real estate? If you’ve already done so, what’s the hardest thing you’ve had to deal with? Be sure to let us, as well as your fellow investors, know in the comments section! Continue reading here: www.expresscapitalmtg.com
