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Ian Watt Personal Real Estate Corporation - Sotheby's International Realty Canada

Blog by Ian Watt

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U.S. real estate: Good investment

 

 Forget big-box retailers and mega-sized fashion outlet stores. As the U.S.

 

housing market continues to plummet, increasing numbers of savvy Canadians

 

are embracing a new, money-saving strategy - cross border real estate

 

investment.

 

The financial benefits can be stellar. In fact, according to a panel of

 

experts who spoke recently at the Vancouver seminar entitled Buying in

 

Washington State and Beyond, current market conditions make it tough to

 

actually find a downside to investing south of the 49th parallel.

 

Most immediately apparent, with the dollar effectively at par and expected

 

to remain there for the foreseeable future, Canadian money simply buys a

 

whole lot more house than it does in our still overheated Lower Mainland

 

marketplace. New supply is also becoming more diverse and upscale as

 

developers react to consumer demand for sophisticated product with a

 

contemporary edge - especially in the burgeoning condo/hotel sector.

 

In this new market place, Vancouver's sister city of Seattle is gaining ground as an

 

investment location of choice thanks, in large part, to a vibrant economy and proximity to a plethora of amenities. "Seattle is consistently ranked one of nation's most desirable cities," notes Dean Jones from Seattle-based Realogics, a company specializing in real estate market research and prod-uct development

 

throughout the Pacific Northwest. Small wonder considering Seattle hosts

 

more than 200 large-scale events annually, is visited by many cruise ships

 

every year, and is home to five professional sports teams, seven museums,

 

plus more than 55 art galleries.

 

More good news U.S. law, unlike its Canadian counterpart, prohibits

 

mandatory or exclusive rental programs even in the increasingly popular

 

strata-style hotel condominium -an owner may rent their property to whomever

 

they like, whenever they choose, either privately or through the in-house

 

rental program - thus further enhancing the appeal of a vacation/secondary

 

property that helps pay for itself over time.

 

Still, Dennis Archer, owner of the Archer Group and a specialist in

 

cross-border real estate transactions, cautions that while he believes this

 

an excellent time for Canadians to purchase property in the United States,

 

it is crucial for any investor to seek professional advice on the many

 

nuances differentiating Canadian and American law.

 

Inheritance taxes that kick in upon death of the owner, possible

 

restrictions on assignment sales, and the requirement to declare a rental

 

election on your first U.S. tax return if you are planning to use your

 

property as a revenue generating investment are just a few of the

 

considerations.

 

However, the panel was unanimous in its overall assessment: Whether you're

 

looking for a more favourable tax structure, legacy building, portfolio

 

diversification or you'ie simply a snowbird searching for a vacation home in

 

a warmer climate, now is a great time to turn your attention south for solid

 

real estate investment potential.

 

- Susan M. Boyce, 24 hours