Canadians searching for hot deals on US properties

With the sub-prime housing crisis casting a dark a shadow over the United States, many Canadians are searching for hot deals on American properties.

But is it the right time to invest in U.S. real estate? And just because you can bargain shop, can you really afford all that goes with owning foreign property?

These are the top questions TD Waterhouse senior vice-president Patricia Lovett-Reid has been getting.

Before investing your dollars into a U.S. property get the complete answers to these tough questions:

1. Getting a fix on prices: Quoting the U.S. National Association of Realtors, Lovett-Reid says housing prices have declined an average eight per cent from a year ago with a current median price of about $200,000. But, she stresses, the situation varies from state to state.

2. Ready to negotiate: Negotiating the tangled web of American real estate investment isn't easy. Unlike investing in Canada, she says purchasing property south of the border can be risky and confusing.

It's important to map out the cost structure in U.S. dollars, especially considering the loonie will likely depreciate against the U.S. dollar over the next year.

"When we look at where the dollar is now, we expect it to depreciate closer to the 95-cent level in 2008 -- and 92-cent level in 2009. So that can have an impact."

3. Research plus: She also suggests doing considerable research on available opportunities and vacationing in the location to make sure it's the right property. Lovett-Reid advises people to ask themselves a few questions:

-- Why do I plan to buy this real estate?

-- Is this an portfolio investment or is it going to be for personal use?

-- Will this help you fulfil your goal expectations -- because right now there is a tendency to buy on impulse.

4. Cool off: People currently searching must give themselves a cooling-off period to evaluate the reasons they are tempted to buy the property.

The extra cost of upkeep, security, utilities, and other expenses -- whether the property is occupied or not -- must also be calculated into the overall cost.

Because emotions can come into play, she says it's important to note "there is no real rush" to buy because the U.S. has yet to bounce back from the sub-prime meltdown.

5. Waiting may be best: "It still may pay you to wait even though we are in a very depressed market," she says. If people were planning to move down soon, then the timing to buy is good.

6. Cash buyers: because getting mortgages can be difficult, given the massive number of foreclosures and defaults on loans in the past year.

"I think if everyone is expecting to come down here and find gold, it's not going to happen," says Kafin.

"It's like the stock market, there's no guarantees. But if you work with a company that's knowledgeable and serious about what they are doing and they understand the economics of the market, then you are really going to be OK."

7. Forget about financing?: Make sure you use a Realtor like www.843Realtor.com that can get you to a croos border banker and help make you financing a breeze.

8. High cost of insurance: High insurance premiums can further complicate a property purchase, with issues revolving around "acts of nature" that affect homes and condos located in hurricane-prone zones such as Florida -- or Texas properties that are suspectible to flooding, and earthquakes and mud slides in California.

9. Disaster insurance: So to ensure they are properly protected, homeowners augment their coverage by purchasing supplemental in- surance from agencies such as Florida Citizens Insurance, which deal specifically with high-risk properties. Instead Canadians should look at Myrtle Beach South Carolina with a low hurricane imact zone.

Many variables will determine the ultimate cost, including the type of property, the location, the neighbourhood, and previous claims such as water damage, which can result in higher premiums.

10. Protection against thieves, fire: In essence, Worters says, buyers should have four different policies.

In addition to the regular homeowner's insurance coverage that covers theft and fire and buying the high-risk packages from Florida Citizens, which covers wind damage, the owner would also have to buy flood insurance, available through the federal government because the other two polices are "limited."

11. Downside of no insurance: Those who skimp on such insurance, or don't know about it, can end up like some of the victims in Louisiana in August 2005, she adds.

Condo and co-op buyers will typically have a master policy which pays for the structure of the building.

But, she stresses, the owner must make sure they have enough insurance to cover the cost to rebuild that condo, and therefore may need to purchases extra policies for full protection.


12. Consulting tax specialists: She also suggests having a tax specialist who knows how to deal on both sides of the border, to optimize your tax filing. "The list goes on of what you have to do here," says Lovett-Reid.

Financial advisers in Canada will help clients crunch numbers, and see whether purchasing property in the U.S. is affordable to them.

"Ask the tough questions of the people you are going to be working with," says Lovett-Reid. "But almost more importantly, ask them of yourself."

Call Toll Free 888-935-8862 and ask a Myrtle Beach Real Estate Company www.843Realtor.com