What’s next for investors in the U.S.?

New figures show that residential sales in the U.S. have experienced their highest growth in 18 months, but with the loonie still struggling to keep up with the American dollar, what do these stats mean for Canadian real estate investors?
 
“Personally, I want to keep buying,” said Phil Wazonek of Distinctive Realty Services, who invests predominantly in Arizona.
 
“You will not get the huge price increases we saw in 2008-2013, but I believe low double-digit returns and three to five per cent capital appreciation is still available, especially when you can lock in cheap money for 10-year terms."

Alongside this anecdotal evidence, the National Association of Realtors’ latest figures herald good news on the ground for Canadian investors in the U.S., as average prices continue to increase in value.

NAR’s figures show that the median price of existing homes was $212,100 in March 2015, a 7.8 per cent gain compared to the previous year.

But if you haven't entered the U.S. market yet, don't worry. "There are still some great opportunities in the U.S. to purchase rental properties that provide 10-plus per cent cap rates and realize price growth at the same time," said Arnold Porter of Turnkey Real Estate Investment Group and Arizona for Canadians.

Chad Urbshott, an investor and founder of EquiGrowth Capital, says that competition is fierce and just seems to be getting tighter, especially in South Florida, where he invests.

"This seems to be synonymous across most areas of the U.S. from comments I hear from fellow investors," he added. 

"If you can find an undervalued property in this environment, holding and renting for any duration will surely enjoy solid gains for the foreseeable future. I would advise holding existing properties and continue buying."

For Wazonek's U.S. properties, his payables have grown 20 per cent so far in 2015 and his tenant turnover has dropped dramatically.

“This is telling me that people have jobs and can pay their rent. All this tells me the economy is getting better.”
 

 

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