Every year thousands of Canadians travel to Florida for a little fun under the sun. Yet with the U.S. housing market still sputtering from the fallout of the mortgage crisis, and the loonie at near parity with the greenback, more and more Canadians aren’t simply heading south for a holiday: they’re going to buy cheap property.
“The deals right now are phenomenal,” says Brian Ellis, vice-president of Florida Home Finders of Canada. “There is lots of stuff under $100,000 that used to be selling in the high $200,000 range.” Some 54,000 foreclosed homes are currently up for sale in the state, along with thousands of condominiums, and Canadians—the largest group of foreigners buying U.S. properties—are ideal clients for real estate firms. “They love the Canadian market as we have a stable economy, the best banks in the world, and we’re paying cash,” notes Ellis.
A growing number of brokerages in Florida are now trying to cash in on the trend, assigning country specialists to work with their Canadian counterparts to find buyers. One real estate outlet called Zen Real Estate even markets a website (www.askzenrealestate.com) that caters specifically to Canadians and provides access to real estate trend charts and reports for neighbourhoods in the southwestern part of the state.
Ellis cautions, however, that buying properties in Florida is not without risk. His firm regularly holds seminars in and around the Toronto area to educate prospective buyers about the tax and immigration issues involved. “If you stay more than a certain period of time, you can be deemed a resident alien and have to pay taxes to the IRS,” says Ellis.
Moreover, there are troubles stemming from the U.S. foreclosure crisis, which saw banks skirt rules in handling foreclosures—several law firms and banks have been accused of fabricating documents to sign off on legal affidavits. The result has been people buying homes without legally acquiring title to them. According to Ellis, the only way to avoid such a nightmare scenario is to stay away from foreclosed properties. When it comes to Florida real estate, you might be safer buying swampland.