As a real estate investor, opportunity knows no borders. But before you cross over into Canada, you’ll want to be sure you understand some of the unique aspects of investing outside of the United States. Once you do, you’ll discover a wealth of new properties to choose from.
Benefits of Investing in Canadian Real Estate
The United States real estate market continues to boom, even in spite of the pandemic. But as someone with a large portfolio and a desire to tap into new markets, you may find Canadian real estate to be another option. Here are some of the specific benefits American investors enjoy:
- Exchange rate. The exchange rate for U.S. citizens is definitely a plus. It means the American dollar stretches further in Canada and has the opportunity to buy you more real estate than it would in the United States.
- High demand for rentals. If you thought real estate prices were high in the U.S., get familiar with Canada’s booming market. Many households are being totally kept out of the home ownership market. As Zeifmans explains, “For the first time since 1971, the percentage of home ownership in Canada has fallen, and rentals now account for 32% of Canada’s homes. Rent prices are being driven higher, making the decision to become a landlord in Canada a decidedly lucrative one.”
- As any investor knows, diversification is a must. And while you might be diversified across different property types and locations in the United States, you’re still entirely dependent on the American economy. Venturing into Canada gives you some international exposure in your own “backyard.”
We’re not saying Canadian real estate is a good investment for every American real estate investor, but it’s worth considering.
4 Tips for Smarter Investing
In many respects, the same fundamentals of real estate investing hold true regardless of which side of the border you’re on. However, there are some nuances and things to keep in mind. Here are a few helpful tips:
- Put Boots on the Ground
While not a requirement, it’s always recommended that you see a property in person before investing in it. This is true whether the property is located down the street from your house, or it’s across the border in Canada. (In fact, it’s more important that you see an international property than a local property, simply because you don’t have as many reference points to leverage as assumptions.)
When traveling to Canada, you’ll need to make sure you have the proper documentation to enter the country. It’s also helpful to meet with a local real estate professional to get a feel for the property and the area around the property.
- Understand Taxes
Taxes are sky-high in Canada. If you don’t account for these taxes, you may think an investment opportunity is more profitable than it truly is. Thus it’s imperative that you do some research on the front end.
As an American investor, you should be familiar with terms like personal income tax, withholding tax, sales tax, speculation tax, and land transfer tax. These are complicated issues that require in-depth analysis. Thus, it’s a good idea to meet with a Canadian tax professional to get a feel for how these different taxes will impact your rate of return.
- Get Familiar With Financing
One of the best parts about investing in Canadian real estate is that you have plenty of financing optionsavailable to you. In fact, you don’t have to use private money or a Canadian bank. There are plenty of U.S. banks that will fund your purchase of Canadian real estate (assuming you meet the underwriting requirements). Start asking around to see which options you have available to you.
- Try Investing in REITs
Not quite ready to buy your own Canadian property? You can get your feet wet by trying a Canadian real estate investment trust, or REIT. These funds operate in much the same way that U.S. REITs do – giving access to a portfolio of income-producing properties without the risk or burden of owning it all yourself.
Adding it All Up
You’ll have to decide whether or not Canadian real estate has a place in your investment portfolio. And if it is, you’ll want to take the time to study each opportunity until you find the one that makes the most sense for your finances and goals.
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Canadian home sales, prices surge to new record in March
OTTAWA (Reuters) – Canadian home sales rose 5.2% in March from February, setting a new all-time record amid strong demand in markets across the country, the Canadian Real Estate Association said on Thursday.
The industry group said actual sales, not seasonally adjusted, rose 76.2% from a year earlier, while the group’s Home Price Index was up 20.1% from last March and up 3.1% from February.
The actual national average selling price hit a new record at C$716,828 ($572,821) in March, up 31.6% from a year earlier and rising 5.7% from February.
($1 = 1.2514 Canadian dollars)
(Reporting by Julie Gordon in Ottawa)
Hot real estate market sparks warnings to potential buyers as complaints to regulator double
As home sales in the province continue on a dizzying trajectory, the province’s real estate watchdog and regulator are warning buyers to be wary of what they may be getting into.
The Real Estate Council of B.C. (RECBC) and the Office of the Superintendent of Real Estate said that in the first three months of 2021, they have seen an increase in inquiries and complaints.
Calls to the regulator were up 42 per cent over the previous year, while complaints, such as how offers were made and accepted, were double the number received in the same period in 2020.
“Buying a home is one of life’s biggest financial decisions. There are potential risks at the best of times, but with the added pressure and stress of the current market conditions, those risks are amplified,” Micheal Noseworthy, superintendent of real estate, said in a statement.
Planning on buying or selling a home this spring? With increased market activiy, its important to understand the risks, and we are here to help. Here are some tips to help you find the most up-to-date information before you make a decision: <a href=”https://t.co/7D8d5Of5XZ”>https://t.co/7D8d5Of5XZ</a>
The Real Estate Board of Greater Vancouver says sales in the region have continued at a record-setting pace.
Residential home sales covered by the board totalled 5,708 in March 2021, up 126.1 per cent from March 2020, when the COVID-19 pandemic hit, and up 53.2 per cent from February of this year.
Rural and suburban areas have experienced the biggest spikes.
For the past two weeks, Jay Park has been in the middle of the buying frenzy.
He and his partner are trying to upgrade from their one-bedroom apartment to a two-bedroom condo or townhouse in Vancouver.
“I wish we had done this a month or two ago,” he said.
Park put an offer on a $1-million condo, $4,000 above asking price.
“To entice the [seller], we put in a subject-free offer, but it wasn’t successful,” he said. “They accepted $110,000 over asking price that was also subject-free.”
The hot market has led to bidding wars. Some would-be buyers have even lined up outside for days to try to get a jump on a property.
Erin Seeley, the CEO of the council, is warning buyers to do their research and be aware of risks before making an offer.
“It’s really important that buyers have engaged with their lender before they’re making offers so they know how to stay within a reasonable budget,” she said.
Seeley said some of the complaints the council has heard from buyers is that they weren’t aware the seller has a right to take an early offer.
“And the seller was really in the driver’s seat about setting the pricing,” she said.
Aaron Jasper, a Vancouver realtor, advises clients to avoid cash offers and to include finance clauses even if it may mean they lose a deal.
“There’s a lot of frustration among buyers, feeling pressure to take some risk,” he said.
“You’re better to be delayed perhaps a year getting into the market as opposed to being completely financially ruined.”
Jasper also says realtors are limited in the advice they can give to clients on legal matters, home inspections, potential deficiencies with homes, and financing.
‘Caught up in the craziness’
Other tips from the council include seeking professional advice before making a subject-free offer or proceeding without a home inspection, and speaking to a professional to determine how market conditions may be affecting prices.
Meantime, people like Jay Park say they are still keen to buy. Park has more viewings scheduled and is optimistic.
“It’s a very exciting time for us, but I also don’t want to get caught up in the craziness and make a purchase that’s above our means.”
Source: – CBC.ca
Black Press Media introduces one of Western Canada’s best real estate platforms helping home buyers Find. Love. Live. that new home
Need an agent who knows the community?
Or, is it time to look for a new place to live, but you don’t know what’s on the market?
Whatever the real estate need is for residents in the communities of British Columbia, Yukon & Alberta, there’s a new way to do that one-stop shopping – by visiting Today’s Home.
The slogan for the site is “Find. Love. Live.”
“We want people to find their dream home, love it, and live in it,” said group publisher Lisa Farquharson.
Building on the success of Black Press Media’s niche digital platforms – Today’s Home brings the same wealth of knowledge and local expertise to the search for a home, be it buying, selling, or even just daydreaming about what changes you can make in the future.
Search hundreds of listings that local real estate agents have available.
The listings cover properties around the region, from a one-bedroom, one-bath condo for $339,900 to million-dollar acreages throughout the province of BC, Yukon, Central Alberta and beyond.
Click on a listing, and see not only the realtor handling the property sale, but links to his or her other listings and social media feeds. With the click of a mouse, take a virtual tour of the property, find the property’s walking score, and learn about nearby amenities.
There are links available to schedule a showing, or send the agent a comment or question.
Want to share a listing? When you click on the share button, you’ll actually send an attractive digital flyer of the prospective property, not just a link.
There’s even a button to help determine how much you have to spend, courtesy of the convenient mortgage calculator.
Plus, scroll down the page on Today’s Home and find a list of expert local real estate professionals who can answer questions or help with that home sale, Farquharson explained.
Today’s Home offers the advantage of the massive reach that Black Press Media has built throughout Western Canada with its network of community newspapers and online products. That allows the public to tailor real estate searches based on location, price, and other key factors while allowing real estate professionals to gain unprecedented audience reach with their listings.
Today’s Home will dovetail into the media company’s existing print real estate publications.
“Black Press Media has real estate solutions in print and now we can add in the digital component,” Farquharson said.
Watch for expansion of the Today’s Home platform in the near future, she added. That will come as Black Press Media adds a new component – the development community. Developers will be able to reach a huge audience when their projects are ready for presentation.
For information on Today’s Home, contact group publisher Lisa Farquharson at 604-994-1020 or via email.
Happy house hunting!
Source: – Aldergrove Star