International capital loves Canadian real estate. With more than $1 trillion expected to flow into global real estate from China alone over the next decade, investors large and small are looking to stake their claim in the Great White North.
The opportunity is there for you, as well — if you know how to seize it. Here’s what you need to know, and what you should do, before you jump into the Canadian real estate market.
- Understand Dos and Dont’s for Foreign Buyers
By and large, Canada welcomes foreign real estate buyers with open arms. Still, if you’re not a Canadian citizen, you’ll need to remember some special considerations for foreign buyers of Canadian land.
Chief among these are the 15% foreign-buyer surtaxes imposed by two major Canadian cities, Toronto and Vancouver, with more potentially to follow. If you’re looking to buy in either metropolis’s urban core, be sure to factor that added cost into your calculations.
- Consider Vacant Land
Not sold on the idea of a pricey Vancouver high rise or anonymous Winnipeg tract house? Consider investing in vacant land instead. Vacant land is obviously more affordable than improved or built-upon lots, and it comes with a fair bit less maintenance as well. In many parts of Canada, it’s possible to find impressive bargains on spacious lots within sight of a major city — for instance, thousands of lots of Ontario land for sale lie within Greater Toronto’s commuter belt.
- Vacation Properties Are Potentially Lucrative (and More Useful Than You Think)
You don’t have to visit your Canadian lake cabin every weekend to reap the benefits of owning your very own slice of heaven. Compared with equivalents in pricier parts of the United States or Europe, high-end Canadian vacation homes are within financial reach of small-scale investors. And the country’s outdoorsy culture makes for a vibrant short-term rental market. If you’re not able to enjoy your vacation property firsthand, why not enjoy its cash flow?
- Seeking Income? Know What You’re Getting Into
Looking to stake your claim to a north-of-the-border income property? You’re in good company — the Canadian rental market is humming along quite nicely.
Just know what you’re getting into before you buy. If you don’t live within driving distance of your rental propert(ies), you’ll need to have a local manager on call to address tenant concerns. For multi-property landlords, partnering with a property management company is usually a good bet. This Toronto Globe and Mail piece outlines some additional considerations for first-time Canadian landlords.
- Line Up Financing Well in Advance
Don’t wait until the last minute to get pre-approved for a mortgage or secure financing by some other means. Plenty of U.S. banks are happy to lend to American buyers of Canadian real estate, but you’ll want to check with yours well in advance to make sure that’s the case. Keep in mind that vacant land is tougher to finance — you should expect to put at least 50% of the purchase price down at closing.
Have any tips on investing in Canadian real estate? Please share in the comments below.