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Canadians Investing in US Real Estate
Low interest rates, favourable exchange turn U.S. into hotspot
EVEN FOR INVESTORS IN CENTRAL CANADA, WHERE THE METROPOLISES OFFER DIMINISHING RETURN ON INVESTMENTS, THE UNITED STATES OFFERS DENSELY-POPULATED MARKETS WITH STRONG FUNDAMENTALS AND NO SHORTAGE OF RENTAL DEMAND.
All across Canada real estate prices continue to rise at an incredible rate making buying an investment property an increasingly difficult task. The Canadian government has mismanaged the real estate market so insidiously that investors may find themselves struggling for cash flow and high ROI. This has many looking South of the border for investment opportunities.
The US real estate market (in contrast with the Canadian real estate market) was built on capitalist ideologies, less red tape, more incentives to develop, and real estate friendly tax rules, meaning there is a far greater opportunity for higher returns. Investors always go where the returns are.
The Shortage of Starter Homes Extends Beyond Major Cities
SUPPLY OF ENTRY-LEVEL HOUSING IN U.S. IS NEAR A FIVE-DECADE LOW, ACCORDING TO RESEARCH BY FREDDIE MAC
A reminder that the United States is short approximately 3 million homes, and this shortage is not isolated to major cities only.
Canadians looking to diversify their real estate holdings south of the border should look no further than to Canada's booming housing market to see the results of supply shortages. The US housing market is in a boom right now and has a long way to go.
https://www.wsj.com/articles/the-shortage-of-starter-homes-extends-beyond-major-cities-11626872400
Transport Canada to study high-frequency rail reaching Windsor
CANADA'S TRANSPORT MINISTER OMAR ALGHABRA SAYS FEDERAL LIBERALS ARE COMMITTED TO STUDYING HIGH-FREQUENCY RAIL THAT EXTENDS FROM TORONTO TO WINDSOR — BUT HE HAS NO FURTHER DETAILS TO GIVE.
This would be huge, especially with the new "work from home" or "mixed" working environment we find ourselves in. There is already a mass exodus out of the GTA to more affordable cities like Windsor, but this would take things to a whole other level.
With or without the highspeed rail, Windsor remains a fantastic investment option for investors looking to take advantage of a border city on the rise.
Miami ‘Hack Week’ hopes to lure tech programmers to Magic City
Miami continues to press (with great success) to be the next Silicone Valley; we all saw what happened to California real estate driven by billion dollar tech companies and high-paying tech jobs.
It's always best, as investors, to get in early
https://www.miamiherald.com/news/business/article252896728.html
How hot is Miami’s housing market? See how it ranks against other U.S. cities
MIAMI RANKED AS THE THIRD METRO AREA WITH THE HIGHEST YEAR-OVER-YEAR INCREASE IN RESIDENTIAL SALES IN THE COUNTRY, ACCORDING TO THE RE/MAX NATIONAL HOUSING REPORT.
Miami continues to attract businesses and residents from Northern states. Attracted to the warm climate and business-friendly governance, Miami is shaping up as a top investment destination for real estate investors.
https://www.miamiherald.com/news/business/real-estate-news/article252930633.html
Ride-sharing app eyes South Florida for headquarters move
SOUTH FLORIDA COULD ATTRACT ANOTHER VENTURE TO ITS RISING STARTUP SCENE.
Not sure how many of these I need to post to get investor's attention!
Better lifestyle, lower cost of living in north Tampa Bay, Florida
PASCO COUNTY FEATURES A PRO-BUSINESS GOVERNMENT LEADERSHIP IN A RIGHT-TO-WORK STATE WITH LOCAL INCENTIVES, LOW OPERATING COSTS, AND NO PERSONAL STATE INCOME TAX.
180M People Could Be Looking for Homes in Coming Years
EXPERTS PREDICT THAT MANY MORE MILLENNIALS, WHO ALREADY COMPRISE THE MAJORITY OF THE HOME-BUYING POPULATION, WILL BECOME HOMEBUYERS IN THE COMING YEARS.
The US, like Canada, is experiencing a significant shortage in housing that will likely take a decade or more to clear up. This makes the US a prim investment option for international investors.
American Queen Voyages, a newly formed riverboat cruise line, will anchor its base of operations in South Florida.
American Queen Voyages, a new company formed from the merger between Miami-based Victory Cruise Lines and American Queen Steamboat Co., will anchor its headquarters in Fort Lauderdale.
More than 1,000 tech jobs are slated for Downtown Miami.
Seventeen businesses are committed to bringing 1,858 jobs to Miami over the next three years, according to the Miami Downtown Development Authority, including 1,069 technology positions. The DDA told Miami Inno that 286 of those jobs have been created at this point.
Sephora, Lucid Motors, Bowlero sign leases at Miami Worldcenter
Just a reminder that the USA is the big leagues when it comes to real estate and wealth generation. Most of the world's biggest and wealthiest corporations are headquartered in the US. Follow the $$.
Microsoft coming to Brickell, FL
Microsoft is the latest example of a global tech firm expanding to Downtown Miami. The company is leasing 50,000 square feet of space and is the second major corporation to lease space at 830 Brickell this year.
Using this metric, USA's real estate market is nearly 50% cheaper than Canada's
All investment opportunities can only truly be evaluated in relation to other investment opportunities. Right now, the USA is cheap relative to Canada.
https://www.blogto.com/real-estate-toronto/2021/11/canada-home-value-ontario/?fbclid=IwAR1tiLQk2Ap9wpiTGshpvyyDa2AFDqcU8xKosCVIGeJomyqLieM9zjebufc
There’s not enough supply (homes) to meet demand, with little relief in sight. The U.S. needs about 3M more homes, and it will take years for builders to catch up.
By one estimate, the U.S. is more than 3 million homes short of the demand from would-be homebuyers. Pandemic-related supply chain problems aren’t helping. They’re adding tens of thousands of dollars in cost to the typical house. But the roots of the problem go back much further – to the housing bubble collapse in 2008.
Fla. rents are up because demand is up, and new residents boost demand. In 2020, 167 people moved in for every 100 who left. In 2021, the inbound number was 210. People from all over the world continue to flock to this coastal state with low taxes and great weather. Given supply shortages for labour and building material, supply simply can't keep up with ever-increasing demand. This is pushing rents higher as well. Florida has always been known as a snowbird state, but now it's become one of the top places to live in the world for people of all ages.
Dwindling returns have Canadian real estate investors flocking South of the border.
Canadian Purchases of U.S. Real Estate – Quick Facts
- Canadians made up 8% of total foreign buyers in the U.S.—the top country of origin among foreign buyers
- Canadian purchases totalled over $5 billion (CAD) in 2021
- Top destinations for those Canadian purchases were: Florida (38%), Arizona (24%) and California (7%)
- The average purchase price paid by Canadian buyers was $601,100 (CAD)
- https://www.canadianmortgagetr...
Rising wages across the US will lead to higher rents and higher real estate prices
That's according to a review of Bureau of Labor Statistics data by The Playbook, which found average weekly earnings rose 5.7% in U.S. metro areas between February 2021 and February 2022. The average employee in a metro area is taking home about $48 more than they were in February 2021 ($920.30 compared to $872.59).
The US is likely a decade or more behind on building single family homes for people to live in. This is going to provide a floor for housing prices and push rents higher.
There are several key differences between investing in Canadian large multi-family vs investing in US large multi-family which simply make the US (in general) a far more favorable environment.
In sum, strict rent control laws across most provinces make it difficult to operate large multi-family properties with large profit margins, they also make it difficult to invest in property repairs since it is often not profitable to do so. These strict rent control laws across Canada keep profits low and risk high.
Statistics like these highlight the importance of staying up to date on current market trends while finding ways to capitalize on them.
https://nypost.com/2022/09/20/...
Investing In U.S. Real Estate From Canada. Most investors don't have the in-depth market knowledge necessary to avoid potential massive mistakes. This extra level of risk keeps most would-be investors on the sidelines permanently. A fantastic option for Candian investors looking to get into the USA real estate market is via syndication. Let the experts do the market research and put your money to work in a more passive fashion.
Directly Investing In U.S. Real Estate From Canada Entails More Work Than You Might Think. You have to recognize that there is no such thing as a simple direct investment in real estate. It’s more likely that you’ll have a part-time job running a house that you own, renting it out and being responsible for calling the plumber and chasing down tenants that don’t pay and so on. There’s a lot more to that than many people realize.
Quote from @Scott Innocente:
Investing In U.S. Real Estate From Canada. Most investors don't have the in-depth market knowledge necessary to avoid potential massive mistakes. This extra level of risk keeps most would-be investors on the sidelines permanently. A fantastic option for Candian investors looking to get into the USA real estate market is via syndication. Let the experts do the market research and put your money to work in a more passive fashion.
Directly Investing In U.S. Real Estate From Canada Entails More Work Than You Might Think. You have to recognize that there is no such thing as a simple direct investment in real estate. It’s more likely that you’ll have a part-time job running a house that you own, renting it out and being responsible for calling the plumber and chasing down tenants that don’t pay and so on. There’s a lot more to that than many people realize.
I have had my property in the USA now for three months. Things are going well so far. It is imperative that you have a team in place because investing at a distance presents some unique challenges
Californians moving to Florida are landing in cities throughout the state.
A massive wealth transfer is about to take place that could have a major impact on the real estate market. Baby Boomers are set to inherit over $68 Trillion by 2030 as their wealthy parents pass their built-up wealth down the line. This influx of cash will impact real estate from resale to rentals.
There are approximately 618,000 Millennial millionaires, according to WealthEngine data, as part of a study compiled by real estate firm Coldwell Banker. Millennial millionaires make up approximately 2% of the total U.S. millionaire population. The majority of Millennial millionaires have a net worth that ranges from $1 million to $2.49 million and fall between the ages of 34 and 37. Due to inheritances, trusts and estate planning, there will be a steady flow of Millennials getting very rich soon. Since the Millennial generation is smaller than the Boomers they're inheriting from, the wealth handed down will be highly concentrated. Ironically, this could contribute to increasing wealth inequality.
Rents across the USA continue to explode higher. The good thing about rising rents is that once interest rates start coming down again, rents are likely to remain elevated increasing investor's cash flows significantly.
We love investing in states that have low taxes. Over long periods of time, these states increase their competitiveness and are more likely to attract businesses and employees fleeing high-tax states.
