For Canadians, investing in U.S. real estate can be an attractive option, offering diverse opportunities from vacation homes to rental properties. That appeal is even stronger as federal and provincial regulations and policies impact Canadian real estate investing, with anti-flipping rules, and short-term rental restrictions.
The U.S. can offer excellent real estate opportunities for Canadians, but because it’s a vast country, it can be challenging to decide on a location. Finding the right destination and appealing to the right markets is important for maximizing your investment returns.
For Canadians buying real estate in the U.S. their choices reflect their travel patterns, with 41% buying in Florida, 23% in Arizona, 9% in Hawaii, and 6% in California.
U.S. Market Dynamics
Real estate markets in the U.S. can vary significantly by region. For example, cities like Phoenix have seen substantial growth in property values, driven by population growth and strong job markets. On the other hand, some coastal markets may offer more stability but with higher entry costs. Additionally, there are some cities that are often overlooked that can provide a good entry point for a U.S. portfolio. For example, Detroit offers very affordable properties in areas that are undergoing revitalization, for a potentially high ROI.
Canadian investors should conduct thorough market research, considering factors such as local economic conditions, rental demand, and property taxes. Tools like Zillow can provide insights into market trends and property values to start a search.
However, getting expert help with navigating markets is recommended. RBC U.S. offers a unique program to make buying and investing in U.S. property easier. Their HomePlus™ Advantage program offers a holistic approach, connecting potential buyers with experienced U.S. real estate agents, tax and legal advisors, and providing access to a free U.S. home-buying e-guide.
Popular U.S. Locations for Canadian Investors
There are a few areas that are particularly popular with Canadian investors.
Florida: The Sunshine State
Florida consistently tops the list as the most popular U.S. destination for Canadian real estate investors, accounting for 55% of all Canadian purchases. It boasts a warm climate and a strong tourism industry for vacation rental investments; it also has no state individual income tax. The Florida real estate market is known for its resilience, with strong demand driven by both domestic and international buyers. Moreover, Florida’s popularity as a retirement destination ensures long-term appreciation potential.
Cities like Miami, Orlando, and Fort Lauderdale offer a range of investment opportunities, from high-end condos to vacation rentals.
Arizona: The Grand Canyon State
Arizona is the second most popular destination for Canadian investors, as it offers a warm climate to tempt vacationers and a relaxed lifestyle to attract new residents. This creates demand for both short and long-term rentals.
The state’s robust economy, driven by sectors like technology, healthcare, and education, ensures a steady demand for housing. Additionally, Arizona’s popularity as a retirement destination continues to drive demand for single-family homes and condos, making it a stable investment choice.
Cities like Phoenix, Scottsdale, and Tucson offer affordable real estate options with strong potential for growth. Arizona’s real estate market is generally more affordable compared to coastal states, making it an attractive option for investors, especially for those starting out in real estate investing.
California: The Golden State
California is popular among Canadian investors as it offers some of the most lucrative real estate opportunities in the U.S. Cities like Los Angeles, San Francisco, and San Diego, which are known for their high property values and strong rental markets. California’s diverse economy, driven by industries such as technology, entertainment, and tourism, ensures continued demand for housing.
Investing in California comes with higher entry costs due to the state’s expensive real estate market. Property prices in major cities are significantly higher than in other U.S. states, making financing a crucial aspect of your investment strategy.
Get Support, Wherever You Choose to Invest
No matter where you are searching for a U.S. property, having the right financial support is essential. RBC U.S.’s cross-border mortgage services make the process as smooth and efficient as possible for Canadian investors, providing you with the tools you need to succeed in the U.S. real estate market.
With flexible mortgage options and the ability to finance properties across all 50 states, RBC U.S. helps you capitalize on opportunities. They offer secure financing with favourable terms, while providing the benefit of avoiding the foreign national premium that other U.S. lenders might charge. Additionally, RBC’s pre-approval process allows you to move quickly when the right property becomes available and allows you to use your Canadian credit history for mortgage qualification.
Furthermore, RBC’s HomePlus™ Advantage program assists Canadian buyers with a comprehensive suite of tools and resources to help guide them through the U.S. homebuying process. This includes access to U.S. real estate agents who specialize in helping Canadians find properties that meet their investment goals, as well as tax and legal advisors, and home insurance providers. You can even get a free U.S. home-buying e-guide.
Whether you’re investing in a vacation home in Florida, a retirement property in Arizona, or a rental property in California, RBC U.S.’s cross-border mortgage services can support your journey.