If you’re like most people, the idea of buying U.S. property in the current market comes with the benefit of real money making potential alongside the drawback of dealing with foreign U.S. real estate regulations. And you are absolutely on the mark in that assessment, to a point. The reality is, if you are serious about hitting your financial goals, you need to be proactive and push past those initial urges to stay within your comfort zone. Did you know that more millionaires were made during the Great Depression than any other time in American history? This ‘Great Recession’, open your mind to amazing money making opportunities.
1) Timing: You need to recognize the depth of opportunity within an otherwise seemingly bleak situation. Blah, blah ‘U.S. fiscal cliff’ ‘economic recession’ = average John/Jane can actually afford to buy assets currently undervalued – and turn those into sources of wealth. Canadians have spent billions of dollars in the last three years scooping up U.S. foreclosures to rent them out and eventually sell them once the market prices increase.
2) Foreign Regulations: Admittedly, those who think they can merely buy ANY U.S. foreclosure or U.S. real estate without performing due diligence on the specific U.S. housing market and legal regulations are going to run into problems. It is ill-advised, to say the least. HOWEVER, did you know you can find U.S. foreclosures (or U.S. short sale listings), purchase U.S. real estate, hire property management, get financing, get tenants and essentially get your entire DIY U.S. real estate business off the ground without ever leaving the comfort of your home? Not, it’s not magic (at least in that conventional sense). The internet is a powerful tool, you just have to know how to use it effectively. If you are a Canadian looking into U.S. real estate, all the surge of activity has produced a wealth of resources, information and advice. The question is: what are your priorities? In general, you want to continuously have certain things on your mind with U.S. real estate.
3) Market research: I’m talking market-specific here. Due diligence in ANY investment is a necessary safeguard to protect your money.There are great free resources for learning market research strategies available right on this site. You need to keep in mind that local factors will determine your investment strategy from start to finish. Obviously, consulting an expert is great if possible, but if you’re like me, you want some first-hand knowledge anyway.
4) Taxation regulations: OK, I’m going to say it, as obnoxious as it may sound to listen to a millionaire complain about taxes – yes, my diamond shoes are too tight, my wallet is overflowing with fifties and paying out copious amounts of double tax is frustrating. There are plenty of ways an accountant or lawyer skilled in Canadian-based U.S. real estate investments can help though. It is wise to perform some background research yourself, so you have an idea. A really useful government of Canada publication can be found here: http://www.cra-arc.gc.ca/E/pub/tg/p151/p151-lp-11e.pdf.
5)Strategics: You need to develop a market-specific investment strategy! This is crucial to your success. It’s a cliche for a reason: if you fail to plan, you plan to fail.
6)Stay the course: Achieving goals is not merely a matter of one or two nights of late night research. You need to give yourself a chance to get things going. Don’t try to overload yourself with information, create a plan and follow-through. Get support, reach out to like-minded individuals and stay motivated. The hardest part of any goal is finishing, so be sure to have your game face on.