How far does your dollar go in the U.S. real estate market?
For Canadians living in communities where real estate prices are already high and steadily climbing, purchasing a property south of the border seems like a hot deal.
Retirees have long been flocking to the Sunbelt as a winter destination, but now emerging Snowbirds—working Canadians with their eyes on warmer climes —are interested in an investment that’s more fun enjoyable than a savings account.
Alain Forget, the head of business development for RBC Bank (U.S.), says that clients often decide to purchase a property in Florida after researching the rental prices in desirable areas.
A two-bedroom, two-bath home on the Gulf Coast in Fort Myers can rent for USD$3,500 a week, and similar prices can be found in The Villages, a large retirement community in central Florida. Many buyers choose to rent out their property to cover costs or even turn a profit.
Orlando, Fla. is more economical than some other Florida destinations. Forget gives the example of a client who recently downsized in Toronto, purchasing a 1,000 square-foot downtown condo for CAD$1 million. This person also bought an eight-bedroom vacation property in a gated community near the theme parks, complete with a pool and outdoor kitchen for USD$540,000.
While some people cash in investments to purchase a vacation property, a U.S.-dollar mortgage lets buyers mitigate some of the expense associated with exchanging the currently low Canadian dollar.
It can be difficult to secure a U.S. mortgage without a credit history in the country. RBC Bank uses your Canadian credit history to help you qualify.
Forget also explains that unlike most U.S. banks, there is no premium charged to foreign nationals at RBC Bank, and that the loan can be paid off in part or in full at any time without penalty. In this way, savvy buyers can take advantage of a hike in future exchange rates.
Once you have the funds and support to make the big move, it’s important to figure out where to buy and investigate how far your money will take you.
In partnership with RBC Bank, we compare average house and condo prices in the Sunbelt to three cities in Canada.