How Can I Invest In US Houses

Leveraging, renting vs owning, making an investment or buying a home?

How Can I Invest In US Houses

Postby Park » 07 Mar 2012 09:25

http://business.financialpost.com/2012/ ... ng-houses/

"But no less than Warren Buffett recently said in a CNBC interview that he would like to “load up” on a couple of hundred thousand single-family homes because it is a “very attractive asset class now.”

Buffett said what held him back was that the business of being a landlord, of managing the homes, was “enormous.”"

Right now, American houses look like they're worth considering as an investment. How can a Canadian investor, who is looking for a passive investment, invest in American houses? Another related question is how can I short Vancouver houses :P ?
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Re: How Can I Invest In US Houses

Postby apater » 07 Mar 2012 13:21

Assuming one wants to remain an investor, and not take on the enormous second career of being a landlord, one would hope to find a US based REIT that purchased thousands of individual homes and took on the landlord responsibilities.

Otherwise, one could hire an experienced property management firm to perform landlord duties.
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Re: How Can I Invest In US Houses

Postby patriot1 » 07 Mar 2012 19:33

apater wrote: one would hope to find a US based REIT that purchased thousands of individual homes and took on the landlord responsibilities.

You won't, for essentially the reason Buffett gave. Management and accounting overhead would be way too high. Renting out individual houses is essentially a Mom and Pop business using unpaid (and untaxed) labour, both in Canada and the US.

Another issue with US REITs in a taxable account is that return of capital distributions would be treated as income by CRA.

There is a thread on RE investing in Phoenix not too far down this forum, it has some very good information from one of our members.
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Re: How Can I Invest In US Houses

Postby ghariton » 01 Jul 2013 23:45

You can always buy a condo in New York City. There are five apartments about to come on the market, specially built for healthy living. Prices range from $15 million to $50 million. But think of the capital gains to come. !!!!

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Re: How Can I Invest In US Houses

Postby randomwalker » 07 Jul 2013 11:59

Not a recommendation but you might want to look into Tricon Capital (TCN) on the TSX

http://www.triconcapital.com/
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Re: How Can I Invest In US Houses

Postby kcowan » 08 Jul 2013 11:08

randomwalker wrote:Not a recommendation but you might want to look into Tricon Capital (TCN) on the TSX
http://www.triconcapital.com/
It looks like TD Securities clients are unloading these today. (Although it could be one large investor dribbling them out.)
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Re: How Can I Invest In US Houses

Postby adrian2 » 08 Jul 2013 11:43

kcowan wrote:
randomwalker wrote:Not a recommendation but you might want to look into Tricon Capital (TCN) on the TSX
http://www.triconcapital.com/
It looks like TD Securities clients are unloading these today. (Although it could be one large investor dribbling them out.)

Randomwalker, you've been outed! :P
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Re: How Can I Invest In US Houses

Postby randomwalker » 08 Jul 2013 21:32

adrian2 wrote:
kcowan wrote:
randomwalker wrote:Not a recommendation but you might want to look into Tricon Capital (TCN) on the TSX
http://www.triconcapital.com/
It looks like TD Securities clients are unloading these today. (Although it could be one large investor dribbling them out.)

Randomwalker, you've been outed! :P


Like that one hedge fund manager who would go on CNBC in the late 90s touting a stock he already owned only to have his boys back at the shop selling into his made for TV rally. Talk about moving the market lol
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Re: How Can I Invest In US Houses

Postby Hammerer » 09 Jul 2013 18:18

patriot1 wrote:Management and accounting overhead would be way too high. Renting out individual houses is essentially a Mom and Pop business using unpaid (and untaxed) labour, both in Canada and the US.

Don't forget to consider that a property manager would only hire a plumber to perform any minor task involving water, etc. And since they're passing on the cost, their interests in who to hire and at what rate may not be aligned with yours.

Being able to DIY lets you capture a lot of that otherwise lost value. Sharkbite fittings are a lifesaver :)
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Re: How Can I Invest In US Houses

Postby kcowan » 10 Jul 2013 12:23

Hammerer wrote:Being able to DIY lets you capture a lot of that otherwise lost value. Sharkbite fittings are a lifesaver :)
Just beware that the price of performing labour in the US without the proper visa can be refused border entry if it is a revenue-producing property!
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Re: How Can I Invest In US Houses

Postby freedom_2008 » 11 Jul 2013 08:57

kcowan wrote:
Hammerer wrote:Being able to DIY lets you capture a lot of that otherwise lost value. Sharkbite fittings are a lifesaver :)
Just beware that the price of performing labour in the US without the proper visa can be refused border entry if it is a revenue-producing property!


That is correct, if you rent out your US property for 14 days or more in each year, it is a rental property by their definition. If you are not a US citizen nor with a US work visa, then you cant do any work (including cleaning, painting and yard work) or manage (including posting ad, screening renters, and hiring workers) your US rental property yourselves; If you do any work on/for your US rental property without a work visa, you work illegally in US and break US Federal law, and if they caught you or someone reports you, you would be kicked out and banned from entering US.
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Re: How Can I Invest In US Houses

Postby kcowan » 11 Jul 2013 10:39

A friend of mine was stopped at the border with new kitchen cabinets in his trailer. He said he was going to install them in his cabin at Mt Baker. This was in the 80s so the border agent was more flexible. He was given a warning and allowed to proceed. That is when I learned about the rules.
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Re: How Can I Invest In US Houses

Postby Hammerer » 16 Jul 2013 03:13

And for the record, I've never done so, and never owned US property.

Just emphasizing that "Renting out individual houses is essentially a Mom and Pop business using unpaid (and untaxed) labour, both in Canada and the US" is easier than it used to be, and more profitable as a ma&pa operation because of the DIY aspect. Even if they are valuing their time put in, you're allowed to DIY things that you aren't allowed to get paid to do or were otherwise difficult in the past.
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Re: How Can I Invest In US Houses

Postby Green » 28 Aug 2013 01:27

A semi-retired acquaintance who has great work flexibility bought a house in the warm Southwest USA, they live in the USA in winter and live on a sailboat (could easily be condo or cabin) in Canada in summer. They rented out their Canadian home. They will likely do this for a few years and sell the US house hopefully for a profit and re-occupy their Canadian house. That's one way to do it whilst shaking up the lifestyle.
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Re: How Can I Invest In US Houses

Postby Flaccidsteele » 07 Mar 2014 13:57

Just as an aside, I don't know why people would want to do work on their U.S. property unless they actually like doing that kind of thing. Obviously I can only speak for myself, but honestly I wouldn't want to any of that kind of work myself. I do know people who are handy and like to do that kind of thing however.
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Re: How Can I Invest In US Houses

Postby biker » 07 Mar 2014 14:38

I have had dealings with this Canadian company and found them good to deal with.
http://www.floridahomefinders.ca/events
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Re: How Can I Invest In US Houses

Postby SQRT » 14 Mar 2014 04:08

Flaccidsteele wrote:Just as an aside, I don't know why people would want to do work on their U.S. property unless they actually like doing that kind of thing. Obviously I can only speak for myself, but honestly I wouldn't want to any of that kind of work myself. I do know people who are handy and like to do that kind of thing however.

Agree. We don't rent out our Arizona home but every time I try a DIY project, I have to call in the professionals to fix it. Most recent example involved some light fixtures. I would never consider renting out any of our places, too much hassle for too little benefit, IMHO. Especially in the US for the tax reasons mentioned above.
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Re: How Can I Invest In US Houses

Postby Flaccidsteele » 09 Apr 2014 08:59

freedom_2008 wrote:That is correct, if you rent out your US property for 14 days or more in each year, it is a rental property by their definition. If you are not a US citizen nor with a US work visa, then you cant do any work (including cleaning, painting and yard work) or manage (including posting ad, screening renters, and hiring workers) your US rental property yourselves; If you do any work on/for your US rental property without a work visa, you work illegally in US and break US Federal law, and if they caught you or someone reports you, you would be kicked out and banned from entering US.


For readers who may have bought into the aforementioned fear of being "kicked out and banned from entering the US". I just want to let readers know that all the aforementioned tasks can be easily farmed out to U.S. property management companies. I think that I pay around $60-$80 per month per property to "post ads, screen renters, and hiring workers".

My property management company "posts ads" and "screens renters" once every year or two per property. And it "hires workers" at the same frequency (to handle the move-out). Otherwise, for the one or two years per property, they do nothing but send me monthly reports on my rental deposits minus property management fee.

I also wouldn't worry about "cleaning, painting and yard work". Unless you're turning over the property monthly, it happens once every year or two. And the tenant or the HOA handles the "yard work".

Obviously if the property actually needs "work done", then you would have to pay materials and labour for that. Again, it doesn't happen often and the cost relative to rents is pretty small. From my experience. We own properties across multiple states and we haven't even physically visited all the homes and condos we own, let alone "work on them".

This is not to say that owning property is less work than stocks. Stocks is as work-free as it gets. But the rentals are a close second. When my property manager calls about changing a tenant I sometimes have to give approval if there is a cost over $500 involved. Needless to say, this is pretty rare.

Only speaking for myself, when it comes to staying in the U.S., I never wanted to buy a vacation property since it would fix my location year-after-year. I just use the proceeds from the rent to stay wherever I want to at the time.

I'm not sure what "tax issues" people are talking about either. I file taxes with the IRS just like I file taxes here with the CRA. I hire an accountant. I don't have any "tax issues" unless "tax issues" means that I have to file once a year?
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