Tips for International Investors in Canada
Spring buying season of 2013 is about to arrive and the numbers for February are already here. Despite all the ‘sky is falling’ speculations about the Canadian Real Estate market, the stats are still pointing towards a better tomorrow. There is no bubble and hopefully there will be no burst. There has been plenty of price correction going around in major markets and mortgage rates are still historically low.
Not to mention, BMO’s latest decision to further lower the bar on mortgage rates will attract a number of first time buyers. Due to all these reasons, Canada is still one of the best places for foreign investors from the US as well as from other Asian countries.
There are two major reasons why Canada is still attractive for foreign investors. First of all, the Canadian housing market is full of diversity. Secondly, the property buying process in Canada is simpler and more straightforward as compared to other countries. However, if you are a foreigner or a Canadian living abroad, here are a few tips we would like to share regarding investment on Canada real estate.
- Work With the Best – You will require professional help to insure better returns on your investors. A leading mortgage broker firm can help you find the best deal as well as credible lenders. There are a number of brokers who can also help you find the right property without you having to visit Canada.
- Be prepared for the Big Down-payment – While our mortgage brokers can help you find the best deal from your lender, you must be prepared to pay a hefty sum as down-payment. For foreign investors, 35 percent down-payment is not uncommon. However, rest assured that it is your best interest in the long term.
- Stay Aware – When you are investing in a foreign land, you must be well aware of the real estate scenario of that country. Things are unpredictable in Canada ever since the government has intervened in the previously red hot market. Still, the story is different for different markets. Make sure you consult a Canada real estate expert before making the decision.
- Understand the Tax Rules – Tax rules for investors in Canada may be slightly different than tax rules for Canadian residents. If you are buying a house or condo in Canada, you won’t be liable for any special non-resident taxes. However, selling a property as a foreign investor will make you liable for tax. However, rules keep changing and you must remain aware.
- Know the Insurance Cost – In Canada, there are several insurance companies willing to approve non-residents. However, some of them might charge too much. It is advisable to know the insurance cost before deciding to buy a certain property in Canada.
- REITs or Private Property – Investing through Real Estate Investment Trust and buying a private property, each has its own set of pros and cons. REITs offer transparency and liquidity while private property offers higher returns and better control. Make sure you discuss your priorities with a Canada mortgage and housing expert before making the final move.