Canadians Step Up Pace in Hunt for Prime U.S. Rental Income Property Purchases

Posted by Alex Finkelstein 06/01/11 9:48 AM EST

Author Bio | Archives for Related Stories:

Vancouver, Canada

With the Canadian dollar still buying around $1.03 in U.S. products, investors from the northern Dominion continue to shop for prime rental income properties in established Sunbelt markets of the U.S.

Florida, especially, remains at the top of the shopping list, according to Gary Verwilt, president, Realtor Association of Greater Fort Myers and the Beach.

Tampa, Clearwater, Naples, Fort Myers, Sarasota and almost any market facing the Gulf of Mexico is where the Canucks are looking.

Verwilt tells Canada.com Canadians are the largest foreign buyers of property in Florida, accounting for about one-third of all purchases. Last year, close to 10 per cent of all sales in Florida were made to Canadians

Prices at the higher end of the market such as beachfront properties in Naples, Fort Myers and Sarasota are down 30 per cent to 40 per cent from the peak of the market in 2006, Verwilt says.

Traditional single-family homes in more heavily developed areas are down 50 per cent and 60 per cent or more, "proving that location is always key," he tells Canada.com.

``If you have a luxury home with a dock capable of handling your 38-foot (sport-fishing boat) or 50- or 60-foot sailboat and giving you unobstructed access to the Gulf of Mexico, that will have value regardless of what type of market you're in," says Verwilt.

Still, that million-dollar property today may well be going for $600,000.

Verwilt says that while the real estate market in Florida is still down, it is not out. More than 180,000 homes were sold in the state last year during perhaps its worst real estate market ever.

``Many Canadians are under the false impression that the majority of households in Florida are in foreclosure," Brian Ellis, vice-president, Florida Home Finders of Canada, tells Canada.com. ``That's simply not true. In fact, less than two per cent of households are in foreclosure in the State of Florida."

Ellis estimates about 20 per cent of Canadian buyers are buying for pure investment. The rental market is strong, particularly in Tampa, Sarasota and Naples, he says.

These areas are still creating jobs and they have not been over-built.

"Almost 1,000 people a day move to Florida and they need a place to live," says Ellis. ``Most experts are predicting the rental market in Florida will stay strong for at least the next 10 years."

While the majority of Canadian buyers are looking for a vacation property, they want one that also helps pay for itself.

"About 60 per cent of Canadian buyers are investors," says Ellis. ``In other words, they want a rental opportunity so that (today's rental income) will cover expenses and make them money, and then 10, 15 years down the road, they plan to renovate and realize their dream of having a vacation property in Florida."