Florida real estate for Canadians as an investment opportunity is one of the most lucrative real estate opportunities in the United States. Florida was the poster state of the bubble years of US real estate. It epitomized what valued property was and it followed the national trend with growth that exceeded that with inflation. From 2000 to 2006, the median price of US real estate property in the state was between $105,000 and $248,000. All that changed a year later when the US housing market collapsed. 

This is the prime reason why it is so lucrative for Canadians to invest in prime properties here.  The record number of foreclosures has brought an oversupply of property that exceeded the demand, plunging property values deeper.  You combine this with the weak dollar and a stable Canadian currency, and you have in your hands a golden opportunity to invest in some of the most beautiful pieces of real estate in the country.

Where in Florida to Invest?

Based on data from the Florida board of realtors, the areas hardest hit when the housing bubble burst were locations along the Gulf and Atlantic coasts. Interestingly, these cities also had the highest level of appreciative value during the height of the housing market.  However, areas that are located much more inland did not suffer that much price decline as those mentioned above.

There are also lucrative opportunities at active adult communities.  Because the Housing and Urban Development regulates these communities, it limits the number of people below 55 years of age to live in them.  Sometimes surviving family members want to dissolve the estate and are willing to sell them at really good prices, usually below market value.  These properties can then be used to rent out to other retirees until you can get a return on your investment.

How to Invest?

For Canadians interested in purchasing real estate in Florida, they must first determine what budget they have for the property they intend to purchase.  This is actually done by knowing the debt-to-income ratio.  An ideal number would be 28:36 where 28% is the present mortgage and the rest would be revolving loans or other installment items.  This would at least give a realistic picture of how much they can afford to put into the property, as real estate investment is usually a mid to long-term venture. 

It is also wise to get the services of a reputable real estate agent that knows the area and the available listings.  What Florida real estate for Canadians would need to have done is to get their broker to get MLS, or Multiple Listings Service, in order to be able to match the type of property they are interested in.

The State offers a wide variety of options for Florida real estate for Canadians to have the home of their dreams, from small vacation condos to prime beachfront properties that can cost a king’s ransom.  Due to the collapse of the US housing market, getting these properties at an affordable price is already a reality. 

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Canadians buying US real estate accounted for about 23% of international buyers in the past year according to data from the National Association of Realtors.  This makes up the largest chunk of foreign investment into American real estate for the past three years in a row. 

The US Housing Market Crash

The collapse of the US housing market, along with the fall of the dollar and the global financial crisis that ensued, combined to create opportunities for foreign investors like Canadians to invest and profit from the purchase of prime US real estate.  All of a sudden large chunks of prime properties in choice US locations such as Florida, New York, and even Las Vegas real estate became somewhat affordable for the average investor.  The 30% fall in housing prices combined with a stronger Canadian dollar made it very lucrative for Canadians to flock south of the border.

Essential Tips for Canadians Buying US Real Estate

The fact that American demand for property soured due to the credit crunch, a lot of developers and realtors are encouraging Canadians to invest in US real estate.  Many are offering fire-sale prices from foreclosed properties that were once valued at hundreds of thousands of dollars.  However, before you get that checkbook and sign that contract, there are a few things that you need to know.

Check out the Property First

Never buy a piece of property without visiting it in person.  The pictures online may tell a different story once you finally get to see with your own two eyes the property you are interested in.  This is especially true for foreclosed properties classified as fixer-uppers.  Due to the vast amount of US foreclosures, many US properties sit for a year or more without any maintenance at all.   There have also been reports that some disgruntled US homeowners have taken out their anger on the property being seized by the bank and have vandalized some sections in order for it to be unsellable. 

Be sure that you also check the viability of the neighborhood as well as this will have a direct effect on the value of your property should you decide to sell it later on.  Neighborhoods that have higher crime rates and poor schools should be avoided even if the price being offered is really hard to refuse as this can backfire on you in the long term.

Do Proper Tax Planning

It is recommended that you do not stay in the US for more than 121 days if you do not hold US residency status.  The consequence of doing this is that you may have to shell out income taxes not only in the US, but also back home in Canada.  Consult with a tax attorney that specializes in US tax regulations about the options available to you since investing in US real estate may require you to be in the country for long periods.

Do not Downplay Insurance Coverage

For Canadians buying US real estate, it is important to note that insurance plays a major role in your US real estate investment.  Depending on the location of your property, you may require coverage for natural disasters such as hurricanes and flooding. Take into consideration that the premium for these would likely cost more than your average policy.  Ensure that you have the correct liability insurance for your property.  Be sure to consult with a legitimate insurance firm to know your options regarding this.

For more information on how you can invest and profit from US real estate, check out www.stevemartel.com