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Obiwan,
I’ll find out in a few days about the Negative Gearing aspect of property in Canada. I dont know the US market that well so I wont comment on yields there but some major bonuses of Canada are:
– that the currency exchange rate is almost 1:1
– interest rates are more than 1% lower than Australia,
– property management companies exist like OZ,
– Strong government and secure place to invest,
– More people are migrating to Canada than anywhere else.Personally I’d feel very insecure investing in China or Vietnam where I dont speak the language, dont know the culture and have little faith in the government due to corruption.
Thanks for the responses.
To Answer some of the questions –
1) As a general rule banks here require a 30% down payment on property purchased if you are not a Canadian Permanent Resident or you do not work in Canada. 30% on $30 – $40,000 is not much though!
2) Edmonton still has the largest mall in the world. I havent been there, not too much +CF property there.
3) Vacancy rates vary – I own one +CF IP on Vancouver Island that is in a town with less than 1% vacancy rate. This town is growing at such a rapid rate due to many factors – lifestyle, climate, jobs, tourism etc. Property is still unbelievable cheap there. During my last six months research here I have also found some towns that have +20% vacancy rates. If you are keen to invest in Property in Canada I recommend visiting here and doing lots of research and driving around when you are here.
4) As a warning some houses that you may see on the web seem like such a great deal with + 20% rental returns. I have inspected some of these houses and generally belong in towns that have declining populations and high vacancy rates.
4) I am no tax expert and dont invest in negatively geared property but it is my understanding after talking to other investors here that you can Negative Gear property in Canada and write off depreciation.
5) Capital Gains Tax works exactly like it does back home in Australia.
The only bad thing about Canada is that its -10 degrees outside right now!!
I bought an IP in Armadale about 3 months ago. The Agent managinging the property had four offers from tenants wanting to rent it within a week of advertising. While the property is slightly negatively geared I found that Armadale had a nice feel about it and the Govt is investing money there. It is one of the cheapest suburbs in Perth and has a much nicer feel (lots of parks / village centre and hills) to it than other suburbs such as Medina. After taking a few back roads in Medina I had a bad feeling about the place and couldn’t get out of there fast enough.
After spending the last three weekends studying the Perth Real Estate Market and driving from Manurah to Clarkson attending Home Opens in frustration trying to find a +CF property I am convunced that the only suburb in Perth that comes close to goving a +CF return is Armadale.
A $140,000 house in Armadale generally will return a $160 p/w rent. The vacany rate in Armadale is less than 1% and the State Government is investing in Armadale by building new infrastructure such as new train station, Tonkin Hwy extension, cinemas etc, etc. Although the rental return of $160 for $140,000 is not fantastic it was the best I could find! I also believe that Armadale will grow in Capital due to the new infrastructure. What are your thoughts?
Medina near Kwinana has 3 x 1 houses for 130k. The new rail line will have a station near Medina and its between Freo and Rockingham. Any thoughts?
