Buying a U.S. condo investment
A primer on those interested in a condo investment south of the border
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A primer on those interested in a condo investment south of the border
* Condo fees are relatively cheap—typically under $300 for a two-bedroom * Property insurance will cost $350 to $800 per year * Property tax differs from state to state: it can be as low as 0.5% (in Arizona and California) and as high as 2% (in Florida) * Also find out if the state charges extra non-resident taxes. For example, Florida charges foreign property owners twice as much tax as it does state residents—and these rates can rise, sometimes quickly, with no cap
If, after crunching the numbers, you’re still convinced a U.S. investment condo is the most cost-effective option for you, it’s time to turn your attention to finding the right property. The best way is to enlist the help of a realtor. Before purchasing his two-bedroom, two-bathroom condo in Phoenix, Ariz., Toronto resident Jim Chuong searched online for U.S. realtors who had experience working with Canadian buyers. Working with his realtor, Chuong would cross-reference the listings from his realtor with local crime stats, which he found on free and pay sites dedicated to tracking state, city and neighbourhood crime data. Chuong’s realtor also helped him find properties with the greatest chance of future appreciation. For instance, the realtor warned against buying a stacked condo—two, three and four-storey buildings—which appreciate at a much slower pace than do side-by-side or townhouse-style condos in the Phoenix, AZ area. Once you have a few interesting listings, you’ll need to examine the properties based on your end goal. If you plan on renting the place out for short-terms, you’ll need to consider what other vacationers want. For example, your potential rental income can drop by half if you’re even a block away from a beach. Also, for rental purposes, stick to well-travelled cities and neighbourhoods. Good areas include (but are not limited to):—> Tampa, St. Petersburg, Miami, Fort Lauderdale and Orlando, all in Florida. –> For snow destinations try Stowe and other ski areas in Vermont. These may appeal to people from Toronto, Ottawa, Montreal and the East Coast, where flights are plentiful and relatively cheap. –> Vacationers from Winnipeg, Calgary and Vancouver often buy in the Phoenix/Scottsdale area of Arizona—where condos prices dropped by 50% after 2008 and the state has low property taxes and homeowners’ association fees. –> Also B.C. residents like spending time in Seattle and Puget Sound.
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