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Cons of investing in Florida as a foreign investor

pigeontology

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I read somewhere (Bubble thread maybe) that there are a few cons with investing in the USA as a foreign investor. I can't seem to find the info now.

Can someone please summary the pitfalls?
 
Here are some pitfalls:
- Finanacing maybe difficult. You may need to pay a substantial downpayment (or pay cash). Mortgage insurance maybe neccessary.
- Florida is prone to hurricanes, so getting property insurance that covers hurricane/flood damage may be difficult and expensive.
- If the place is a condo, you should find out how much of the building is vacant or under foreclosure. This will have significant impact on condo fees.
- Talk to your accountant regarding taxation on both sides of the border on your rental income you will be collecting if you plan to rent it out.

You will need to hire a local property manager to take care of your property if you will be renting it out. Not only this makes sense if you live out of town, but it is a legal requirement because managing your property is considered a job and there is no such work visa for this specific circumstance (as a foreigner).
 
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As a Canadian owner, is there a way to set up the US rental property in a way that minimizes the taxes?

This is what I did, after talking to an accountant and good friend who works in a U.S. property title company:
Firstly you will need to hire a property management company to manage your property and tenants (a legal requirement).
You will need to complete a W-8ECI form and submit it to your property management for taxation filing purposes.
Then set up a LLC company and transfer ownership of my property under my LLC using a Quit Claim Deed. Setting an LLC is also a legal requirement and on the plus side it reduces your liability if your tenant decides to sue you for any reason. Your property manager will pay your rental income directly to your LLC bank account.

This method is fairly common and the best way to minimize your taxes. If you do not do so, you will need to pay 30% tax on your rental income.
If the property management company you hire is large and well experienced, they should be able help you with this.
 
Can someone explain what the advantages are of Canadians investing in real estate in the US? I mean, if a particular region of the US was great for RE investing, wouldn't Americans already be doing it, which would drive the prices up and thus make it not so attractive anymore? I fail to see how a Canadian landlord can compete in the US with American landlords who don't have to jump through all the hoops we do to receive rental income there. An American landlord can charge a lower rent and still make more profit than a Canadian. What am I missing?
 
In my situation I moved back to Canada, but was not willing to sell my condo in the U.S. in a depressed market so I am renting it out (which more than covers my mortgage payment) until the condo I bought here is constructed. Hopefully by that time the U.S. market would be better and I could sell it at a better price.
Banks have made mortgages much tougher to obtain since the crash (and interest rates are higher south of the border), so many Americans could not buy a place of their own (let alone invest) so the rental market has picked up.

In places where real estate values have really plummeted, such as California, Nevada, Arizona and Florida (otherwise known as The Sand States in the real estate world), many Canadian and foreign investors have been buying deeply discounted or distressed properties (a condo near the beach in Florida could be bought for less than $100,000) and renting it out to cover the mortgage payments until things pick up. Many investors are also using these properties as their vacation home for a few weeks out of the year (properties near cruise ship ports have been extremely popular for Canadian investors), so they are enjoying the use of their investment property as well.
 
so at the end of the day, if you get a $1000/month rent how much reaches your hands (after rental agency management fees, property taxes, income taxes, maintenance expenses, etc, etc) ?
 
I have no idea about investment in Toronto because I never did so but I can surely say that investment in Mexico will surely reap good benefits in the future. So, look for the investment options available for you online to help you secure your future in financial terms.
 
I read somewhere (Bubble thread maybe) that there are a few cons with investing in the USA as a foreign investor. I can't seem to find the info now.

Can someone please summary the pitfalls?

On November 5th http://www.thepropertyshow.ca/ will be chatting on US investing. Check it out. Lots of experts there
 
I am very interested in this topic as well. If anyone has any book (or reading/resources) recommendations for someone who is starting out, I'd be most appreciative
 
I am very interested in this topic as well. If anyone has any book (or reading/resources) recommendations for someone who is starting out, I'd be most appreciative

Here's a freebie you will not get from a cable access TV show pumping real estate "experts" who want to either make a dime selling you real estate or real estate services or make a penny off your dime by "Con"ning you to invest with them-

The best method of generating profits from Florida real estate is........

Move your a** to Florida, figure out the local market for yourself and then start investing. Absent that common sense approach you are quite likely to fail and worse, waste your precious time.

Unless you are very experienced the surest way to lose money is to invest in real estate from afar.
 
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