Since the great US mortgage bust, investment in U.S. real estate has become more promising.
The thing that is making it most appealing for Canadians is something called the capitalization rate. This refers to the relationship of the income from investment vs. the actual investment price. The primary factor driving the positive turn of capitalization rates in the US is the steadily strengthening Canadian dollar vs. US dollars.
Because of the strong Canadian economy, Canadian dollars have increased whereas the US economic crisis to has caused American dollars depreciate. This has created a large gap between the buying powers of each. To put it simply, Canadians can buy more U.S. real estate for less money than in previous years.
The depressed housing market is another factor driving foreign investment in U.S. real estate.
With the large amount of US homes that have been foreclosed or placed on the market to avoid foreclosure, the current real estate inventory has increased. The tough competition has driven prices down as more people attempt to sell their homes.
This specific real estate investment environment has caused a large influx of Canadian money as investors scramble to take advantage. In fact the rate of Canadian investment in the US has doubled in recent years, reaching a whopping 23.5% in comparison the previous 11%. This makes Canada the largest foreign investor in US real estate.
One of the areas that has shown the most promise for U.S. real estate investment is Florida.
This US state is a prime target for many Canadians who are looking to purchase second homes. The mild winter climate in Florida provides a great alternative to the harsh Canadian winters. Many prefer to enjoy the winter on the beach rather than shoveling snow from the sidewalks back home.
The economy of Florida was already beneficial to this lifestyle as it has always been a winter destination for many people seeking to escape from the cold by purchasing U.S. real estate. Many areas of the state already have businesses in position that can aid in real estate investment. This includes real estate agents and attorneys who are specifically in business to help foreign investors. They are able to offer knowledge to people who may not be familiar with US real estate law.
The good thing about Florida is that the economy there is already starting to show improvement. The bad news is that in order to take advantage of this unique investment window, you will have to act soon. By purchasing your real estate in Florida now, you will be able to take advantage of the low home pricing. Because things are on the upswing, you can expect your home to start increasing in value soon.
If you have been considering purchasing Florida real estate for investment or to have a vacation home, not is the time to contact a real estate agent. A good agent will be able to help you through the process of buying U.S. real estate while finding you the perfect property.