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Tips for Canadian “Snowbirds” Looking to Fly (and Buy) South for the Winter

Arif Harji
by Arif Harji on December 13, 2018


Nature has taught Canadians a thing or two, especially when it comes to migrating south during unbearable winters. 

Travelers who migrate to warmer climates for the winter have become known as ‘snowbirds’ (or more politely, ‘winter visitors’). In fact, a non-profit group called the Canadian Snowbird Association has over 80,000 members and defends the rights of Canadian travelers overseas. The snowbird life can transition into the sun-bird life when Canadians spend the entire year in warmer climates after investing in a vacation home in the right location.

There are several things, however, to consider before taking the plunge and diving into the international real estate market. Of course, you should always be mindful of your budget. No one wants to spend the rest of their life paying for a home they visit three or four times a year. Currency exchange dramatically affects how much house you can and cannot afford. There are other factors as well that you should contemplate before deciding on the location and exact property you want. This guide will help you understand how to buy a home in the United States and abroad. 

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Canadians Are Taking Over the US Housing Market

A survey conducted by the US National Association of Realtors (NAR) found that between April 2016 and March 2017, Canadians spent twice as much on real estate in America than other non-US citizens. The average home purchased by Canadian buyers was US$560,000. Such an amount is quite significant, considering the average US citizen spends just under US$400,000 for a primary single-family home. Canadians, in essence, spent more on homes in the United States than their citizen neighbours.

Another phenomenon of the Canadian takeover of the foreign real estate market is the number of vacation homes purchased between 2016 and 2017. Some Canadian buyers bought their second homes in the United States, which they more than likely plan to use as vacation getaways.

You may wonder how Canadians are capable of purchasing homes away from their primary residence in a country such as the United States, where real estate values increase daily. It is true that the United States continues to see a revitalization of real estate value.  

"The housing market in Canada is another valid factor, currently, it’s experiencing an appreciation in property values that is five times what the United States market offers."

‘Inventory shortages continue to drive up US home values, but prices in five countries, including Canada, experienced even quicker appreciation,’ Lawrence Yun, chief economist of NAR, says. Janice Fox, a real estate agent in Toronto, affirms such analysis as correct by telling media, ‘Canadians are selling homes for prices they could never have imagined, and that's allowing them to buy vacation homes for prices they could never have imagined. They have tons of free capital.’ The capital growth in Canadian families is being put to more comfortable use as homeowners look to invest in real estate outside the country.

Of course, the United States is not the only region to benefit from Canada’s current real estate boom. Canadian residents are also looking in other countries where Canadian currency goes farther and renders even more lucrative results. 

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Buying Real Estate in the United States

There is much to gain as a snowbird looking to purchase property in the northern region of the United States. You can really stretch your dollars on a vacation home in the less-populated, rural setting of Northern California.

This region renders beautiful days and picturesque nights that often include mounds of snow in winter. The homes in the northern part of the Golden State are also beautiful from the inside out. Imagine living within walking distance to the perfect slope. Such is possible when you search in the Shasta County region of California.

Dreaming of the Golden State and moving to the area are two separate things. You will need to do a few things before attempting to purchase real estate in the United States. First, you need a valid passport and driver’s license. Both documents are required to close the deal on your new vacation home. Second, you must provide proof of income.

This area of verification is a smooth process so long as you remain on budget and have proof of a month’s-worth of consistent income. Self-employed buyers may have to complete additional steps such as furnishing personal tax returns and general asset worksheets.

Retired individuals may be approved for a mortgage in the United States if they can show proof of pension payments dating back at least three years. You may be required to provide a more substantial down payment if you recently retired from your job and are hoping to secure a vacation home in the United States. Down payments must come from non-borrowed sources such as savings accounts and financial gifts verified with a gift letter.

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Buying Real Estate Internationally

Perhaps you are a Canadian snowbird who wants to reach beyond the borders of North America and into regions overseas. The process for obtaining real estate internationally is not precisely the same as when you purchase in the United States, so you should do your research and consider the following before beginning the process.

Property Laws: Some countries have specific legislation that foreigners must support to be considered and approved for a mortgage. It serves you well to know these laws before trying to buy a home in the area.

Mortgage Regulations: There are property laws handed down by government agencies, and then there are rules that private firms follow when approving or denying international loans. You should understand how the majority of real estate offices operate to avoid wasting your time.

Places That Attract Canadian Buyers

Canadians are using the additional capital provided by a booming housing market to broaden their horizons everywhere. There are, however, certain cities in the world that attract more attention than others. These areas include:

  • Granada, Nicaragua: Canadians love to get more for their dollar. Granada is the place to get beautiful sites at reasonable prices.
  • Arenal, Costa Rica: Buying a home in Costa Rica is practically a breeze for foreigners, which is why Canadians love this region. Arenal has the mountains that snowbirds appreciate. 
  • Iracema, Brazil: Sometimes you want a change of scenery that does not include the snow and slopes. With beachfront condos and fresh air, Iracema is that place. You may consider this for your second or third home away from home. 
  • Tulum, Mexico: It is not the United States, but it is still within the Northern American region. Tulum offers scenery and a rich history that makes visitors reluctant to leave. 

The average vacation home in Costa Rica may cost anywhere from $80,000 to $200,000. Such is also true of Mexico and Nicaragua. Those hoping to buy a piece of Brazil should expect to pay more, as condos in Iracema typically start at $150,000.

Of course, providing at least 30 percent of the asking price as a down payment reduces the amount that you owe and leads to a lower mortgage. Canadian buyers looking for the lowest monthly fee often find that providing at least 50 percent of the asking price up-front gets the best results, as lenders are more likely to approve lower interest rates for well-qualified borrowers.

Never purchase real estate blindly. Visit the region where you hope to buy at least four times to get a feel for the community and determine if it is indeed right for you. It may also be ideal for you to consult with a real estate agent in both Canada and the country of your choice to be sure you get a fair deal. Buying your first, or second, vacation home is as exciting as being one of many snowbirds in the world. Informed decisions make the experience as stress free as possible.



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