I don`t have all of the answers but I am aware of a few things.
You`ll want to be aware of some of the following (and more):
- Taxation will be an issue. I`m not an accountant but I understand that whatever income you make in the USA is subject to US tax. And depending on how you are structured (or not) in the US, you could be subject to double taxation or you could get credit in Canada for what you pay to the IRS. My understanding is that you are best to be an LLC or something similar so that the income flows through to you as an individual and then you can benefit by getting the Canadian tax credit on what you pay to the IRS. (But you`ll need to talk with your CPA or accountant to verify.) I also understand that if you are a corporation in the USA, you will pay US tax but not get the benefit applied to your Canadian tax and have the pleasure of paying full tax in both countries. Again, I`m no expert but be VERY CAREFUL!
- You could also face the same issues as it relates to Capital Gains Tax. It is possible to be viewed as Capital Gains in the USA and Income in Canada or vice versa. In either case, you will pay double tax
.
- Also keep in mind that Canadians (I think I have this right) are taxed on residency while Americans are taxed on nationality. So if you are an American living in Canada, you will pay US tax and Canadian tax. If I am right (check it out), as a Canadian living in the US, you will only pay US tax. DID I SAY CHECK WITH AN ACCOUNTANT?
- Other issues include the US/Canada exchange rate on the dollar. It could work in your favour but the opposite is also possible. Just one more risk that you have no control over.
- When applying for loans, some banks will look at you differently. I don`t have a list of those that like Canadians but, like here in Canada, they want security. Some will not want to do business with a Canadian living in Canada because they can`t get easy access to you if there is a problem.
- The language in real estate is often different. In multi-family, you`ll hear terms like A, B, C, and D class properties in A, B, C, and D neighbourhoods. We don`t use the same lingo here. Escrow is another term you`ll hear lots of in the US. Bill Backs, RUBS are just a couple of other terms.
- In the US, you can buy lists of just about anything such as names, addresses, and any other set of parameters you want (of owners of buildings meeting any number of certain criteria, etc.).
- It is usual in many markets in the US to face up to 10% vacancy rates. This is normal and they often expect at least a 5% vacancy in their properties. I am aware of one situation where there wasn`t even an effort to advertise if there was only a 5% vacancy.
- Like in Canada, property management is an issue. There are lists of property managers nation-wide in the US that can be found on-line But they tend to specialize in only multi-family. And like in Canada, they can make you or break you.
Just some thoughts. Good luck!