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What you need to consider before buying US real estate?

What you need to consider before buying US real estate?

1. Buying Florida Real Estate Takes Time. You can’t be a passive real estate investor when buying florida real estate. Just like any place in Toronto, you can’t just buy in any area or neighborhood and expect them all to perform the same. It is all about location, location, location. This requires local knowledge and expertise.
2. Renting out Florida real estate will involve hiccups. Managing tenants in a condominium unit requies some management throughout the year. You will likely need to look in to hiring a property manager. They will strive to keep the property up to date and help solve any issues that come up includig collecting rent and finding renters. Nothing is free.
3. Accessing US financing is very difficult. If you think you will find a property in Florida, walk up to the bank and expect them to give you 75% of the purchase price in a mortgage because you are a friendly Canadian, you are dreaming. Getting financing is difficult. Most likely, you will need to contact a Canadian bank and take out a line of credit on your existing home in Canadian dollars.
4. Think about taxes before you buy your Florida real estate property. Uncle Sam will come get you if you don’t plan for taxes before you purchase your property. You must deal with various tax laws when buying real estate and then collecting rent. You also need to think about estate taxes when you die and how this will be handled.
5. Investing in US real estate will require a large percentage of your net worth. Just like buying a second home in Canada, investing in US real estate requires a lot of money. If something happens to that area or property, then a large chunk of your net worth is exposed. Make sure you are comfortable with the diversification strategy or lack thereof.

Tips for Canadians
– When buying real estate, one of the words of wisdom is that you must buy based on location. Chose the location before deciding on the property.
– Make sure you talk to a good tax lawyer and accountant before buying your real estate so you consider your tax situation.
– Make sure you know all the homeowner condo fees and if the condo management fee pool is underwater.
– Speak to a realtor that knows the area well and can tell you about the advantages and disadvantages about the location.
– Speak to someone that has owned property in the area. This can be done by knocking on similar doors nearby to get the real scoop.
– Check rental rates ahead of time and vacancy rates before you purchase the property.
– Check exchange rate and Canadian dollar trends so you can ultimately calculate the cost of your purchase in US dollars.
– Check how far the location is to the airport and major roads and how long it takes to get there.
– Each suburb in Florida will have a cultural identity. Make sure it fits with what you want.