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U.S. real estate: Good investment

Blog by Ian Watt | January 18th, 2008

 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




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




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