Cross-border house shopping: six reasons to be cautious of buying up U.S. real estate
It’s official: we’ve weathered the economic crisis better than the Americans. Does that mean we can stop gloating and start taking advantage of our neighbours? Many Canadians are saying, “Yes we can.” With low interest rates, dropping American home prices and a strong loonie, temptation is high for Canucks to snap up foreclosed houses and condos in the States (there’s certainly no shortage of supply). Yet the prospect of a four-bedroom bungalow in Florida for $170,000 still sounds suspicious. Below, six points of caution to Canadians looking to buy up U.S. real estate.
1. It could be a very, very long-term investment
“This is a long-term buy,” one realtor told the Toronto Star. That may be an understatement, since this isn’t exactly a flipper’s market. The New York Times tells us that over 1,000 new homes are being built in Las Vegas while nearly 10,000 are sitting empty and thousands more are likely to go up for sale.
2. Repair costs could be excessive
Frustrated homeowners have been known to vandalize their foreclosed property before they leave, or gut their home of all usable items. We’re talking everything: toilets, tubs, light fixtures and, quite literally, kitchen sinks.
3. Where would the squatters go?
The plethora of squatters will have to find other foreclosed houses—why not right next door?—to move into once their current home is sold from under them (no offence to Queen Omega).
4. Where would the wild animals go?
Foreclosed homes are havens for wild animals: raccoons the size of orangutans, bobcats and even black widow spiders. Of course, there are also the more common, less cool-sounding pests to worry about: rats, roaches and weeds.
5. Living in a ghost town is not everyone’s cup of tea
If the house becomes unsellable, it could always provide a nice place to retire. That is, if one has a penchant for sketchy neighbourhoods composed of abandoned homes.
6. Condo maintenance fees add up
In Florida, some of the remaining condo owners who haven’t left their buildings are getting stiffed with exorbitant maintenance fees. Altruists would probably be welcome, though.