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Buying property in the US:
the nuts and bolts
American real estate transactions
differ little from the process in Canada. Financing
can be arranged using mortgage brokers here in
Canada or financial institutions in the US, which,
for all of their past recklessness, have been
raising rates and are much more conservative when
lending money.
Property managers in traditional
vacation destinations are not hard to find. Many
real estate agencies have in-house management
services. Residential property managers have a
national association with an internet database
that lists members in several, but not all, states.
In other areas where these services are scarce,
local realtors are helpful allies in finding managers,
says Mr Maranger.
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Buy low, sell high. It may be clichéd
advice, but it's sound — particularly when talking
about investing in real estate. Toronto-based real estate
broker Paul Maranger says that even as well-heeled foreign
real estate investors are 'discovering' Canada, residents
considering investing in property should look beyond
our border.
DUE
SOUTH
Here in Canada, it's still a seller's market. The average
rise in housing prices in the country's major markets
has gone up 8.7% since the same period last year to
$329,113. That's great if you've already invested in
the market, but buying into it at this point means trusting
past returns will continue into the future, and that
someone with more nerve than you will take his or her
chances on turning a profit in the same uncertain market.
Today's strong loonie has clout
in the US housing market, a market where the burst housing
bubble is causing a serious credit crunch. Following
years of frenzied buying and skyrocketing prices, defaults
on mortgages are now endemic and the big sell-off has
begun.
"With the dollar as it is and the
varied situation in the United States, there are tremendous
buying opportunities in the southern states and particularly
in the states that were grossly overheated," says Mr
Maranger.
PLACE
IN THE SUN
On his list are spots like Florida and Arizona where
prices are beginning to come down. "I think people are
going to find one heck of a buy in those locales if
they are ready to stomach short term volatility," he
notes.
"Looking at the astronomical values
in Ontario's cottage country it would be an excellent
time to look at disposing of that and reinvesting that
money in Florida," suggests Mr Maranger. "There are
going to be great buys there for somebody who wants
a vacation property that provides some supplemental
income."
Christiane Goldstein, a realtor
in Boca Raton, FL, has seen prices in that area begin
to soften as more and more properties go on the market.
"On my street there are six houses for sale," she says,
"and the street isn't very long." She expects the glut
of newly finished but vacant condos in the area will
pull prices down even more as developers try to recover
what they can of their investments.
OFF
THE BEATEN PATH
Mr Maranger also points to other states that may not
have the cachet the traditional getaway destinations
do, but may appeal to someone looking for property strictly
for investment and rental income.
"There are other areas where industry
is moving, like Tennessee and Alabama, where you have
a solid base of well-paid blue collar workers who would
be ideal tenants," he says.
According to Royal Bank of Canada
research published in July the median price of a new
home in Alabama — which has been spared the value
rollercoaster that other states have ridden and has
a relatively strong economy — was $144,000 US this
spring. (The median price in the US was $246,500 in
2006, according to the US Census Bureau.)
And, of course, for anyone looking
further south to Latin America for vacation or retirement
properties, the US dollar is standard for deals there
— for now at least.
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PHYSICIAN LIFE
