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Mada Partners > Blog > Investing in US Real Estate from Canada
Investing in US Real Estate from Canada

As a result of the Covid19 pandemic, valuations in both commercial and residential real estate in the United States have flattened, the market presents a tremendous opportunity for Canadians wishing to invest in US real estate from Canada. Because property ownership also entails maintenance and taxes, many owners are attempting to divest while also obtaining the highest break-even value for their home, lest values continue to drop. As a result, this is an excellent time for Canadian investors to enter the US real estate market.

Investing in US Real Estate from Canada can be a viable option for many people. The US market is lucrative and has often been the subject of investments from foreigners.

If you are investing in US Real Estate from Canada, you must be aware of the pros and cons that come with it. There are plenty of factors to consider when you are planning to buy real estate in the United States.

Why Invest in US Real Estate from Canada?

There are several reasons to invest in US Real Estate from Canada. From low taxes to higher demand, here’s why you should buy real estate in the United States:

1) Higher ROI

US properties tend to have lower prices than Canadian properties. This makes it a better investment opportunity in terms of profitability. The returns on investment (ROI) are much higher than what Canadians see in their own country.

2) Lower taxes

Property tax is an important factor when you decide whether or not to invest in a property. When you are investing in US Real Estate from Canada, you get access to lower property taxes which means more savings for you!

3) Higher demand

In 2019, there were more than 1 million Canadians living across the border (according to Destination Canada). This implies that there is always a large demand

But before you start packing your boxes and planning a cross-border move, consider these tips for investing in US real estate from Canada.

1. Know the numbers

Americans have gone through some rocky times recently when it comes to buying homes and surviving financially. Before you rush into anything, make sure you know how many foreclosures there are in the areas where you want to invest. You can also check with local banks to find out how many people are behind on their mortgages. While this data doesn’t guarantee you’ll be dealt a losing hand, it will help you prepare for potential issues down the road.

2. Seek professional advice

If you’re thinking of investing in US real estate from Canada, the first thing you should do is contact an accountant or investment advisor who can help you understand the laws and regulations surrounding cross-border investments — including tax issues, money transfers and other financial concerns. Your advisor will also help you understand your options for financing a real estate purchase or refinancing existing debt on properties you already own.

3. Choose the right property type

Consider the property type that best suits your goals. Are you looking to generate rental income? Is this investment property meant to be used by family or friends? If so, consider purchasing residential properties in popular vacation destinations like Orlando, Las Vegas and Phoenix.

Final Thought

The most important thing to keep in mind when investing in US real estate from Canada is that there are taxes to be paid. Setting up a corporation or LLC can help you manage your overall tax burden. Of course, you should also consider the type of property you purchase, as well as your potential rental income. The more you know going into the process, the smoother it will run.

We want to ensure that you understand exactly who we are and what our business is all about. To that end, we have a video that can answer some of these questions. We hope you will take the time to watch it, and then feel free to contact us with any questions that you have. If you aren’t ready to get started right away, don’t worry. We’ll be fine with taking this one step at a time.

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