Heading South of the Border
Motivated by a strong Canadian dollar and what they perceive as bargain U.S. home prices, as many as 1 in 5 Canadians say they’d consider purchasing property in the U.S.
A new survey for BMO Bank of Montreal and conducted by Leger Marketing reveals that as home prices have dropped in the regions of the U.S. which are traditional destinations for Canadian snowbirds, interest in purchasing U.S. property has risen.
Want to know which Canadians to target? Regionally, those in Alberta (31 percent), British Columbia (28 per cent), and the Prairie Provinces (27 per cent) are most interested buying property in the U.S.
Bank of Montreal suggests that Canadians wanting to purchase in the United States should consider the questions shown below. While some of these are lifestyle questions which the prospects will have to answer for themselves, to answer other questions, a REALTOR’s input will be valuable. If you want to tap into this market, make sure you are knowledgeable and can refer prospects to tax advisors and others as needed.
Questions for Canadians Considering Purchasing in the United States:
- What states and neighborhoods fit your needs?
- Since you are responsible for property maintenance, consider how easily you can access your property from your Canadian home throughout the purchasing process and after acquisition.
- Consider flights and airlines, if you can fly there direct, and the cost.
- Research and even ask locals about the community to ensure it suits your needs.
- What to consider when financing the purchase with a U.S. based financial institution?
- It is important to be aware of the differences in mortgage financing and how interest is charged in the U.S.
- What mortgage money is available to international buyers?
- Furthermore, understand the impact of penalties and withholding taxes if and when you decide to sell your home in the U.S.
- Do you understand the status of the property?
- Understand the terms of the property. For instance, is it labeled as short-sale or on foreclosure?
- The status of the property can have a variety of implications. Be sure to consult an expert before making any buying decisions.
- How will you use your property?
- Is your purchase for investment or lifestyle purposes? This will affect where you buy and how you hold the property. Also, understand the options available and what will benefit you in the long run.
- If your purchase is for income purposes, keep in mind that renting your property means added responsibility. Research the possibilities of increased utility usage, property management needs and the vacancy rate in the area to ensure you’re prepared. Investment properties can be subject to taxation in two countries, so make sure you speak to a taxation specialist.
- How much time will you spend south of the border? Consider how many months of the year you’ll be living there so that your purchase reflects your lifestyle.Be aware that there are rules regarding the amount of time you can spend in the U.S. before being considered a U.S. resident and subject to paying income tax.
Tags: economy, Real estate news
