To Buy or Not to Buy? 3 Cross-Border Couples Share Their Perspective
If you regularly spend time in the U.S., you may have thought about buying your own property south of the border.
Whether you’ve weighed the pros and cons countless times or you’ve just started thinking about it, it’s important to consider your specific situation, how you like to spend your time, as well as your cash flow.
We talked to three couples about how they made the choice to buy or rent property in the U.S..
A Retired Couple Makes Family Memories in their Arizona Home
Robert and Dana bought a home in Arizona shortly after they retired at age 55. Both teachers with healthy pensions, they were able to retire early and get a jump on their golden years, purchasing a home near Phoenix after renting for a few winters.
When asked why they decided to buy, they talked about a number of factors that made the decision easy for them.
According to Dana: “By retiring on the early side, we expected to have many years travelling to the U.S. and escaping the Canadian winter. We looked at it as a long-term investment. Plus, Robert was still earning an income from a side business, so money was still coming in — we knew we could carry the costs of the home without digging into our savings.
On top of that, we use the home much more than just in the winter time. Our daughter is a teacher so she comes down with the family every summer. We’ve spent family holidays in Arizona, and friends and family use the home almost every month of the year. So it’s worth owning for us. We’ve had wonderful experiences and created memories we wouldn’t have if we simply rented a condo through the winter.”
Retired World Travellers Just Can’t Stay Still
Gloria and Richard also head to the U.S. every winter. But as world travellers, buying property just isn’t for them.
Gloria says: “We don’t often go back to the same place twice. Some years we go to Florida, other times to California — sometimes for 2-3 months, other times for only 4 weeks. We also love to travel to Europe once a year, which is something we wouldn’t want to sacrifice by carrying the costs of a home. We don’t want to be tied down — we want to explore.”
Condo Over Cottage: Busy Professionals Use Their Florida Home to Escape Winter
Nicholas and Tina have owned a condo in Florida for several years. For these busy professionals with an active lifestyle, buying in the U.S. was the right fit:
As Nicholas explains it: “We bought for several reasons. For one, we really like warm weather and being active, and we wanted a place that was easy to get to. The main benefit of buying was just the convenience of having our own place to leave our stuff, so that when we visit we don’t have to lug everything back and forth. Also, we have a dog and always will. So eventually when we go for a long period of time, we know we can bring her — it’s not easy to rent when you have pets.
“For us, this was never going to be a vacation spot,” he says, “But rather a second home to stay at when we are sick of winter. It’s not for everyone, so people really need to think about whether they are willing to commit to this expense. In the end, it’s like a cottage — you need to make sure you love the place and location. Don’t buy it as an investment, but rather as a place to enjoy for yourself and your family.”
It’s important to consider both your lifestyle and your cash flow if you are considering buying or renting property in the U.S.
If you think buying is right for you, keep in mind that purchasing U.S. property is not as difficult as you might think. Here’s why:
Cross-border mortgage services are available, in some cases allowing you to use your Canadian credit history and banking relationship to secure a U.S. mortgage. This helps you avoid the cumbersome mortgage process some Canadians expect to go through.
Home values in the U.S. are generally less expensive than in Canada and mortgage interest rates are still relatively low.
If you do own a home in the U.S. and the value rises, you can unlock the equity in your home by refinancing it. You’ll be able to get U.S. cash out of your home, which can go a long way toward your goals. What’s more, rates in the U.S. are relatively low, making it a good time to finance.
Buying versus renting a property in the U.S. is an individual decision that should be weighed with your personal list of pros and cons. If you decide to purchase a home in the U.S., make sure you do your research. Look for real estate and lending partners who understand the unique challenges for Canadians purchasing property in the U.S., and be sure to consider all factors so that you can make the most of your time south of the border.
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.
RBC Bank is RBC Bank (Georgia), National Association (“RBC Bank”), a wholly owned U.S. banking subsidiary of Royal Bank of Canada, and is a member of the U.S. Federal Deposit Insurance Corporation (“FDIC”). U.S. deposit accounts are insured by the FDIC up to the maximum amount permissible by law. U.S. banking products and services are offered and provided by RBC Bank. Canadian banking products and services are offered and provided by Royal Bank of Canada. U.S. deposit accounts are not insured by the Canada Deposit Insurance Corporation (“CDIC”). RBC Bank, Equal Housing Lender.