Category Archives: Books

Buying Real Estate in the US as a Canadian

by Julie Broad

I can’t tell you the number of times Dave has come home from shopping with something he didn’t really need, or something that didn’t quite fit but he bought it anyway just because it was on sale!!He’ll buy a pair of pants that are a little too short or a little too tight just because they are 50% off. Or he will buy a jacket with a collar that has one side sticking up and one side laying flat just because it’s a clearance item.

Then he gets them home and tries to actually wear them and complains the whole time that it doesn’t fit or the collar gets on his nerves.

In other words … the only reason he bought the items was because they were on sale not because they really fit his needs.

And that is what some Canadians seem to be doing these days as they rush down the the US and buy property. With the Canadian dollar so strong, our economy holding steady, and the house prices in the US so much lower than they’ve been in years, many Canadians think their favourite destinations like Palm Springs, Phoenix, and various places in Florida are experiencing the biggest Boxing Day like sale EVER. And they rush down in a frenzy to buy a place …. or in some cases they don’t even rush down they buy without ever seeing what they are picking up!!

If you are even remotely considering US property as an option in the next few years then you absolutely must pick up the new book by Philip McKernan called South of 49.

It’s an enjoyable read told through the story of a fictional character named Ted who decides he wants to buy in the US. And he nearly does just what I am describing above … rushing down to join in on the big US property sale that is happening.

Dave on the beach in Delray Beach, Florida

Through the coaching of a good friend of Ted’s, named Sid, and the level headed nature of his wife Nancy you are taken through the steps of what is involved in buying US property as a Canadian. Through the story of Ted and Nancy it becomes very apparent early on that it’s even more important to start with a plan and a clear understanding of WHY you want to buy property in the US.

The biggest issues to get a handle on before you buy a property in the US are:

  • Will this be an investment or a lifestyle property? The answer to this will make a big difference in where you buy as well as potentially how you hold the property. You’ll also want to make sure you get tax planning advice because you could be subject to taxation in 2 countries if you haven’t set everything up right for an investment property.
  • Where do you want to hold the property? Be sure to consider the ease of access from your Canadian home as well as the other things you’re looking for.
  • How the property will be held.
  • Financing options (most people get financing in Canada to pay cash for their property in the US but there are financing programs available to Canadians in the US if you put a large amount of money down on the property).
  • How much time you plan to spend in the US. This is similar to whether it’s going to be a lifestyle property or an investment property but when you read about Nancy and Ted you’ll realize just how important it is to talk about this and think about this. Does owning a place in the US mean you will only vacation in the US? If you have big dreams of an African Safari or Paris in the springtime then you have to consider that.

Ultimately, I think you should treat this purchase like you would any other real estate investment. Start with your goals. Complete good market research to identify where you want to buy. Begin building the team you’ll need to buy in that area as you search for properties, and then buy your property. To do this properly, I believe, you will have to visit the area you choose to buy in several times and see a lot of properties in those visits.

Then… besides following that process and devoting time and effort to the market research, I believe the next biggest thing you need to take care of is understanding the tax implications of what you buy. And you’ll want to set yourself up in a way that allows you to minimize the tax burden.

Here’s a few things I didn’t know:

  • The rent you earn on a US investment property is charged a 30% withholding tax. This is on the gross rent! Your property management agent is required to deduct this. This is no matter where the transaction takes place or whether the tenants are Canadian or American.
  • To avoid this you may choose to treat your rental income as income connected with a US business instead. This allows you to pay your taxes on the net revenue (after the expenses are paid). Doing this requires you to file an annual return in a timely and accurate manner each year until you get an approval to revoke this. If you fail to file on time you can be required to pay 30% on the gross amount for that year.
  • When you sell your US real estate a withholding tax of 10% of the sale price is payable under the Foreign Investment in Real Estate Property Tax Act of 1980. There are exceptions to this, however, that you will want to understand.

There is a lot to consider when buying an investment property …. especially when you’re looking to do it in another country. If you are a Canadian looking to buy in the US then you should definitely pick up a copy of Philip’s book. And all of the proceeds from the book sales are being donated to helping children in Sri Lanka.

By the way – I’m working on getting Philip and a couple of other experts on the phone in the coming months to talk about this subject. If you’re interested make sure you subscribe to our Rev N You with Real Estate newsletter so you get the invitation to join those calls!!!

Sign Up for Our Free Real Estate Investing Newsletter

18 Comments

Filed under Books, Buying Real Estate in the US

Is Your Big But Keeping You From Investing in Real Estate?

by Julie Broad

But I am just waiting until I’ve read your program a few more times before I make my first offer.

But I don’t know anybody with money to partner with.

But it’s not a good time to buy right now.

But I just haven’t found the right deal.

I wish I had just made those up but those are quotes from actual emails I’ve received this year. And I could go on and on with more from people who read our real estate investing newsletters, our blog posts and even join one of our real estate investing programs. These are people who really want to start investing in real estate but can’t even get themselves to put in a single offer.

I understand… it’s scary. There are people who have lost a lot of money investing in real estate.

But there are just as many (or more) that have made a lot of money.

And you’re taking the time to educate yourself on the fundamentals of real estate investing. And you’ve been learning from people like us that are showing you how to avoid the mistakes we’ve made. (I know you’re doing these things because you’re reading our blog!)

So, if you’re doing all of that and still not making offers, then you MUST read this book by Sean Stephenson called Get Off Your But. Sean says, “our BUTS are huge. And the longer we sit on them, the more they continue to grow!

It’s ok. We all do it! We all have a ‘but’ we’re sitting on that is holding us back from something we really want. But you have to know that YOUR BUT IS THE ONLY THING HOLDING YOU BACK from what you want.

I know this to be true, and yet I have allowed my but to be really big for some of my lifelong goals…  and I am going to change that. I’ve set my goals for 2010 and they are audacious. They are my biggest goals yet. I am going to get off my but and I hope you do too!

Besides being a fascinating and inspiring tale of the life of this three foot tall giant of a man who has never been able to stand on his own two feet due to having brittle bones (the non medical term for his condition), it’s a book full of resources and tools to help you overcome those fears, excuses and insecurities that are giving you the biggest buts.

I’ve said this before when I have talked about my mountain biking accidents … especially the one where I hit the root when there was a small path to the left of it that I could have used to safely get by … you get what you focus on. If you are focused on the things you fear the most or the things that are holding you back then you will have a hard time finding a way around those things.

Sean provides a great exercise in the book to demonstrate this. Essentially he gets you to ask a friend to spend 60 seconds finding everything that is blue coloured in a room. Then, after they have told you everything that is blue, ask the person to tell you a few things that were yellow or red.

It’s going to be nearly impossible for them to name anything that is a different colour because they have been so focused on the blue things.

The same thing happens to would-be real estate investors … they get so hung up on the financing challenges, the fact they can’t find good partners or the lack of good deals that they never actually get going and get off their big but.

So… get off your but! Stop making excuses and start making offers … or just stop letting your big but hold you back from whatever it is you want in your life.

And if you need a little help, I would highly recommend you pick up Sean Stephenson’s book or watch his new TV show on the BIO channel (check out a video about the show below).

No one is dealt a bad or a good hand in life; we’re just dealt cards. It’s up to us to stay in the game and play. Sure, some cards look ‘better’ but they’re really not.” – Sean Stephenson, Get Off Your But p. 257

Sign Up for Rev N You's Free Real Estate Investing Newsletter

5 Comments

Filed under Books, Engage Today 2009, investing, real estate

Top 3 Books Every New Real Estate Investor Should Read

Some girls have shoe fetishes. Others obsess about purses. Some girls love to buy nice tops or fabulous outfits.

Not me. I actually dislike shopping … enormously.

Unless it’s for books.

I LOVE books.

I’ve always been an avid reader … but now that I’m not an employee I find there are so many more ways I can apply what I have read. As an employee, even when I was Vice President and ran a division of the company I worked for, I could never just learn something new and use it. Somebody else had to think it was a good idea and approve it.

Now, I can take what I’ve read and apply it instantly to my real estate investing or online business.

And because I can take what I read, hear or observe and apply it immediately I feel absolutely starved to learn more. And I do … and our real estate investing newsletter readers notice. I often quote from books or review something I’ve read and that leads to a lot of emails asking me about the books I recommend for a new real estate investor … so I tried to answer that question in this video.

In this video I share:

The Top 3 Books Every New Real Estate Investor Should Read

I also share the books I read in September and in the first half of October to give you a sense of WHAT I read …

What books do you think are a must read for every real estate investor?

I’d love to know!! Not that I really need more books to read… the second video shows you the books that are waiting for me to read them. Yes, Amazon loves me. And I love Amazon. My husband Dave on the other hand is not always so pleased to see the brown Amazon box arrive in our house …

Oh … and here are the books that I am going to read next:

Free real estate investing newsletter

Free real estate investing newsletter

7 Comments

Filed under Books, investing, Personal Development, Productivity, real estate