4 Insider Tips: How To Buy Your Dream ‘Snowbird’ Property
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Most Canadians dream of owning and investing in real estate locally. However, more and more Canadians are looking at their options across the border and beyond. Whether it is in search of warmer weather or a secondary home away from home, we are seeing a newfound interest from Millennials, Gen Z, and Baby Boomers looking for greener pastures and plentiful cashflow. The dream of achieving a different kind of lifestyle that offers more than just cashflow is also alive and well. Sunshine, the lure of palm trees, the desert sky, lush golf courses, peaceful breezes and the feeling of being ‘away from it all’ seems to keep moving up on many peoples’ priority lists. Canadians, according to Statistics Research Department, August 31 2021, bought 8,800 U.S. properties worth 4.2 billion U.S. dollars in 2021 (https://www.statista.com/statistics/610979/total-number-of-properties-purchased-by-canadian-buyers-in-the-us/). Back in 2010, that number was over 69,000 U.S. properties. Although this seems like quite the gap in the last ten years, we see this as a renewed opportunity for those looking to expand their real estate portfolios across border. So how do we get you there quicker? And what is the smartest way to deploy your home equity or hard earned capital?
Baby Boomers are seeing a pass down of funds from their aging parents who have stored much of their wealth in their family homes and are now selling them or downsizing. Baby Boomers are also more willing to help their children who are now in their thirties and forties by way of early inheritance and a new conversation is starting around the dinner table: “If we went in together on a property, where would it be, and how much would we all need to chip in for the down payment? Wouldn’t it be cool if we bought a property in Palm Springs or Arizona or Hawaii together? These types of conversations are coming up more and more frequently. Currently, we are seeing our friends, family, and clients saving towards their favourite U.S. destinations, or they are already in possession of the down payment (typically 20-30% depending on the lender). However, investing in a foreign country although very westernized and similar to our own can be a daunting process if you are lacking the right power team. Luckily, our team has gone through the process to make these steps much simpler and straight forward.
With our team’s recent property investment in Scottsdale, Arizona we have learned what to avoid, what the closing costs are (approx $10,000 or 2-3% of the purchase price depending on the financing route you choose), and what financing hurdles to overcome to make cross border investing a reality. Here are some things to think about before venturing into a U.S. purchase:
- A cross border financing specialist who uses your Canadian assets, liabilities and Canadian credit to qualify you is key. Keep in mind the approval process can take up to 60 days so getting started ahead of time is a great idea. There are also other options such as ‘No Income Loans’ and creative financing options.
- A tax lawyer consultation to discuss tax implications and whether you should buy in your personal name, or corporation among a myriad of other discussions to set you up properly for your personal situation.
- A property management company, there are short term nightly rental experts and long term rental experts who can run your U.S. property so you are completely hands off.
- Using a Canadian specialized realtor who can help pre-vet properties so you are receiving hand picked, cash-flowing real estate and not wasting time. They should know which zip codes are the best for return on investment and the highest rents.
Our goal for 2022 is to help as many Canadians buy their dream property in a way that helps them pay off their Canadian expenses and mortgages using their U.S. property’s cashflow. And, of course, helping Canadians invest in a lifestyle enhancing dream destination the whole family will love. If you are interested, it would be our pleasure setting you up for success and mitigating your risk with a power team you can trust. Follow our Instagram accounts and newsletter for more cashflow screenshots from our Airbnb account and updates on our cash flowing U.S. properties and clients. Cheers to wealth building and living an optimal Snow Bird kind of life.
- Amy Leong, Award winning investment specialist realtors in Vancouver, Canada
Instagram: @amyamzz & @allyballam