Contrary to the so-called Trump Effect, the exchange rate and the low Canadian dollar, now is actually the BEST time to invest in revenue properties in the US.
Regardless of these issues, people always need a place to live, and with the ever-fluctuating market in the US, there are many opportunities to take advantage of low prices and the financing that is available to both Canadian and US investors.
For instance, you might consider purchasing wholesale properties in Tampa, vacation rentals in Orlando or turnkey properties in Atlanta, just to name a few of the available opportunities that exist.
Currently I am working with many Canadians who have the vision to expand their portfolio’s and cash flow by investing in the US. We all know that investing in Canada in many markets with the high prices we are seeing and the tightening of the mortgage rules, that it can be quite difficult to cash flow – cash is king after all!
In the US through my lender contacts, you can buy single family properties for under $200,000 and finance them at 4-6%, with 30 year amortizations and low lender fees.
So what should you be aware of?
Just like Canada, when looking at the US you want to focus on the following:
- Buy in markets that still have appreciation – in certain markets, such as Ohio you will not see much appreciation, however in markets such as Georgia, Florida, California and Texas just to name a few you will see appreciation of 3-5% and last year all of these markets went up between 15-20% since the recession in 2008;
- You want to make sure there is more than one industry supporting the economy. For instance in Tampa, FL, they have all the sports teams coming there for spring training. They also house all the call centres for the US – this not only provides jobs but supports the overall economy;
- You want to invest in buy & hold properties as most of these markets still are rental focused rather than buyer focused. Even with the loosening of the lending rules by Trump, buyers will be hard-pressed to get mortgages so the rental demand is and will continue to be high, thus guaranteed cash flow on these properties.
- Finally you want to invest with a group or in a market that can provide good property management and contractors. My partners in Florida that do wholesaling, supply excellent services that support your goals as a property investor, without killing your cash flow. Similar to my partners in Atlanta that sell turn-key properties with tenants and property management in place- which is excellent for that Canadian looking for hands-off investing.
The key to successfully investing in the US is to have good opportunities to buy in areas that allow for appreciation, mortgage pay down and cash flow. Don’t just buy a property because the price is low – do your homework and analysis on the market, the property, the company you are partnering with, etc. It is also important to partner with companies that can provide you with great opportunities to buy low and finally you want to source financing that will enable you to cash flow and grow your portfolio.
As your mortgage broker, I can provide no-charge advice and assistance. I may be able to access the equity in your current home and/or arrange affordable financing through my stable of specialized lenders.
By keeping your interest costs and payments low, we can help ensure that your rents will cover the mortgage. Then as your property appreciates, we can extract further equity so you can make a second investment.
Let’s talk and formulate a plan to help you achieve your goals for investing in the US.