Lucrative Canadian Real Estate Market Spilling over into the US
Foreign buyers are buying up US properties and the biggest increase is coming from Canadians. Even NAR’s Chief Lawrence Yun was surprised by the growing demand from Canadians given the low Canadian dollar. Yun is quoted in an LA Times report that the high housing prices in Toronto and Vancouver were also behind the movement of investment money to buy US real estate.
Canadians are now the biggest buyers of US real estate at $20 Billion per year next to the Chinese at $31 Billion. There’s no reason to believe it won’t continue right through 2018.
One Toronto real estate agent was quoted as saying buyers are cashing out in Canada and then buying second houses to vacation in the United States, usually in Florida. “The Canadians love your weather. We have more money because of our real estate market here — that’s really the answer.”
Canadian Investment in US Property up 50%
Purchases from foreign buyers in the US has grown 50% in the last year. This is a big trend which US real estate agents should be aware of. The lack of housing supply in the US is putting upward pressure on prices, which perhaps Canadian buyers are hoping to gain from.
Many Canadian and Chinese buyers go online to find suitable investment properties. Is your website visible online? Is it truly engaging for buyers and sellers? Take a good look at these real estate marketing packages to gauge where you should aim your strategy. There’s never been a better time to plan your real estate sales future.
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With your initial financing concerns aside, rental properties can offer a high, continuous extra income to help pay off your mortgage, meet repairs, and add confidence to your investment decision. If the work concerns you, consider using rental property management software to help out.
Cynics might point to cash flow issues, paperwork overload, and big unseen repairs as key reasons to be way of rental properties. You’ve seen those issues on TV shows, yet the buyers always seem to handle them an make a big profit. If your plan is to retire happy in Costa Rica or Mexico, this is probably the best way to make that happen.
Watch this excellent Video from Phil Pustejovsky about how to succeed: Take responsibility, think opportunity and take massive action:
Another promising area to investigate is foreign student housing in Vancouver and other high demand cities. Vancouver BC is very attractive to students from China, Hong Kong, Indonesia, Singapore, Dubai, Germany and other counties where wealthy families want to have their kids educated.
They find Vancouver safer and more relevant. CIBT is one company to watch with their huge portfolio of properties in Greater Vancouver, Canada.
Factors that Support Investing in Income Rentals
There’s a housing market crisis across North America and demand for rental apartments, condos and houses will stay high. It’s unlikely that a quick solution will happen to generate housing for everyone. This land development held up by legislation, it’s a sure bet that rental property is going to be a hot investment sector.
Here’s 11 Reasons You Should Take Rental Income Investing Seriously:
growing number of Millennials entering their family starting and home buying years
mortgage rates not forecast to rise much
rental prices can stay high because employment is good and renters have no options
stories of renters destroying the place almost never happen (renter screening process)
you can deduct mortgage interest and real estate taxes on rental properties
you can write off utilities, insurance, repairs and maintenance, yard care, association fees
write off upgrades such as decks, pools, tankless water heaters, and even landscaping
write off depreciation of assets/home
write off solar power generation unit
the income won’t become taxable until you run out of upgrades/repair costs
the renters will have to cover any cost of living or mortgage rate growth
That’s quite a compelling list of reasons why buying a rental property makes incredible sense. And if you live in the unit, then you’ve got your cake and you’re eating it too. So far from being a risky investment, rental income properties have built-n safety and tax features that make them a no brainer. All you have to do is find financing.
Here’s how to calculate the numbers on a rental income property such as cash flow, capital expenditures and all the rest.
What is a typical Return on Residential Rental Property?
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Yes, those numbers are possible when you consider how real property delivers multiple streams of income, including tax savings, and a higher resale value when you want to divest.
There’s so much to learn about property investing such as financing, where to invest, hiring an agent if necessary, choosing tenants, renovation, and when to sell outright if the price is right.
Most investors are too convervative, especially those who are buying a home. Although buying a home is a sensible purchase, a better approach is to let someone else pay the mortgage. Visit the number one real estate investing youtube channel and you’ll find out how how to purchase multiple properties, and manage them efficiently with online rental property software for even greater returns.
If you can handle the risk, the key to even bigger profit is to leverage bank money to buy multiple properties. And how can you top that investment?
By selling the property to someone else who believes in its value more than you do. They’ll pay a speculative premium to have this great income earning asset. Just like a start up business where a buyer may pay much more than you’d expect to take that business to the next level.
I guess the rule here is, get it started, develop the full potential, and you could end up with a big winfall, which you can take with you to a new project, or if you want, just take off to Costa Rica.
For regular single property investors, the key to really powering up returns is in living in that property. So before you decide on a real estate agent and mortgage agent, consider how you can ramp up the full potential of a real estate investment. This will affect the type, location, and size of property you choose to buy.
And those agents will love to work with you because you may be doing additional deals. Get ready to be popular when you get creative with real estate investing.
Here’s 9 reasons why rental income property is ideal:
you can charge rent from the people who live in it
you can live in your investment
you can write off home renovations and improvements
you can write off the cost of new appliances, insurance, realtor and mortgage agent commissions along with legal fees
you can write off your capital gains using tax breaks/retirement tax benefits
huge demand for rental units from younger generations and immigrants
huge demand for homes from millennial aged buyers
home prices are expected to increase
you can borrow and leverage the banks’ money
If you have hundreds of thousands of dollars to invest in rental income property, there are other avenues you can follow such as various reits and investment funds. They’re lower maintenance investments but don’t offer huge rates of return. You’re in this to make money not invest in something that pays like a bank savings account.
One hot investment opportunity is student housing investment. Foreign students and domestic students in places like San Francisco and Vancouver have a very hard time finding rooms or condos. The situation is critical. Take a look at this post on student housing investment in Vancouver for starters. You’ll learn of one company, CIBT Education listed on the Toronto Stock Exchange. They are the leader in this space in Vancouver BC, and you can invest without actually buying properties and maintaining them yourself.
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