Category Archives: foreign buyers

Is it cheaper to buy a house than a condo in the GTA? This expert thinks so

While many first-time buyers look to condos as a relatively affordable option, one Toronto housing market expert says that it is actually less expensive to buy a low-rise home in the GTA.

According to Realosophy Brokerage co-founder John Pasalis, when you control for the size difference between low-rise and condos in the GTA, condos are more expensive per-square-foot.

In the Maple neighbourhood of Vaughan a 1,385 square-foot rowhouse costs $685,000, while a condo of a similar size in the area would likely cost $684 per-square-foot, or $947,000. It’s just one example of a price difference that can be seen across markets in the GTA.

Pasalis believes that this discrepancy in prices can be chalked up, in part, to investor demand.

“The majority of new condominium construction is driven by investor demand — not demand from families,” he writes in a recent blog post. “Investors are willing to pay much more (on a per-square-foot basis) than end users are.”

Pasalis says that investors prefer smaller units, which typically have a better return on investment, which means that developers are creating units that are too small for families, at prices they cannot afford.

“When developers are pricing a unit, they’re thinking to themselves, why would I charge this much when I can get this much?” Pasalis tells BuzzBuzzNews. “And those prices don’t make sense for a two- to three-bedroom unit, which is likely why we’re not seeing as many of those units being built [in the GTA.]”

In order for a condo to be good-value-for-money for a young GTA family, Pasalis says that low-rise prices would have to increase at a much faster rate than they currently are.

“The rate of appreciation for low-rise homes in the 905 region isn’t going to be very high in 2018,” says Pasalis. “So I don’t see this trend changing in the next year or so.”

While Pasalis admits that for families with a budget of $400,000 or less, a condo may be the only option for homeownership, he says that those with one of $700,000 or more should consider their options.

“They can choose to buy a two-bedroom 1,000 square-foot condo in Maple for that price, or a three bedroom 1,385 square-foot row house with a finished basement and backyard. For most, it’s a pretty simple choice,” he says.

Source: BuzzBuzzHome.com –  

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Ontario’s 16 new housing measures

Houses are seen in a suburb located north of Toronto in Vaughan, Canada, June 29, 2015.

The Ontario government has announced what it calls a comprehensive housing package aimed at cooling a red-hot real estate market on Thursday. Here are the 16 proposed measures:

  • A 15-per-cent non-resident speculation tax to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.
  • Expanded rent control that will apply to all private rental units in Ontario, including those built after 1991, which are currently excluded.
  • Updates to the Residential Tenancies Act to include a standard lease agreement, tighter provisions for “landlord’s own use” evictions, and technical changes to the Landlord-Tenant Board meant to make the process fairer, as well as other changes.
  • A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.
  • Legislation that would allow Toronto and possibly other municipalities to introduce a vacant homes property tax in an effort to encourage property owners to sell unoccupied units or rent them out.
  • A plan to ensure property tax for new apartment buildings is charged at a similar rate as other residential properties.
  • A five-year, $125-million program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.
  • More flexibility for municipalities when it comes to using property tax tools to encourage development.
  • The creation of a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.
  • An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.
  • A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.
  • The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed
  • Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
  • A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
  • Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.
  • Provisions that would require municipalities to consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes, among other things.

Source: The Canadian Press – April 20, 2017

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Impact of Trump win on Canada’s real estate: Time to hunker down in your cottages

U.s. presidential election - donald trump

The world’s collective jaws dropped after the early morning announcement: The next President of the United States is reality-TV star, Donald Trump.

But Trump’s victory in the U.S. presidential race raises more questions than confidence—which was reflected in the greenback’s dip early this morning while safe-haven sovereign bonds and gold shot higher. The market is now reflecting fears of a prolonged global uncertainty over the new presidential leader’s policies.

What happens to interest (and mortgage) rates?

For the last few weeks, analysts were predicting that the U.S. Federal Reserve was poised to gradually start increasing interest rates, to reflect the country’s slowly growing economy. Trump’s win may have scuttled this strategy.

Part of the problem is that Trump’s promise to deport 11 million workers—because they presumably entered the country illegally—will have a dangerous impact on America’s currently tight labour market.

Unemployment in the U.S. dipped to its lowest in June at 4.9%. “The country is entering what economists call full employment,” says Phil Soper, CEO of Royal LePage. “By taking that many workers out of the labour force, Trump could bring business to a grinding halt.” Quite simply, it’s a plan that most business people and many leading economists say is very damaging both to the U.S. and to the Canadian economy.

Remove that many workers from the labour pool and you create a labour shortage, which could prompt businesses to contract and slow down in order to fend-off the quickly rising cost of wages.

To combat a business contraction, the U.S. Federal Reserve may abandon decisions to start raising interest rates. The idea is that by keeping rates low, the Fed will continue to encourage banks to lend money and convince businesses to expand (through the use of cheap credit). But it’s been six years of near-zero rates. For many it was time to start seeing better returns. With prolonged low rates from the Feds, it’s unlikely that the Bank of Canada will increase rates, so we can probably expect a prolonged ultra-low rate environment in both Canada and the U.S.

 

Impact on home buyers: Continued low mortgage rates

For anyone buying a home, Trump’s win may help suppress any potential mortgage rate increase that was on the horizon.

This continued low-rate environment won’t stop the slight uptick in mortgage rates, caused by the recent Federal Liberal mortgage rule changes. However, it may prompt different levels of government to consider alternative methods for cooling heated housing markets. According to CBC.ca, Ontario Finance Minister Charles Sousa believes:

“something has to be done” to help people deal with soaring home prices in Toronto.

Sousa is poised to make an announcement next week as to how provincial government will help first-time buyers in Toronto, without hurting home prices in surrounding areas.

For tips on how U.S. citizens can buy in Canada, visit the BRELTeam’s primer on buying homes in Canada.

Impact on home sellers: Could be a rush to buy in Canada

Trump’s presidential win could be a boon for some home sellers in Canada. We could actually see a surge in demand for Canadian homes, says Soper. “Some [Americans] may be so fed-up that they decide to head north.”

This would certainly bolster “Brand Canada,” says SopeMo, as more demand may help support real estate prices, particularly in larger urban centres. Of course, this assumes the American dollar won’t lose value and remove the relatively high purchasing power a U.S. buyer would have in Canada.

If Americans do decide to move north, sellers in bigger urban centres could see the biggest impact as the U.S. dollar still has about 30% more buying power than the Loonie. Home sellers in Vancouver, however, shouldn’t expect a big uptick in American interest, as the Foreign Buyer’s tax that was announced and introduced this past August, will probably dampen interest in property in the Lower Mainland.

 

Impact on vacation properties: Hunker down

Probably the biggest impact will be felt by vacation property owners. Americans are the largest foreign buyers of Canadian property. “Part of the reason is the relative affordability of our recreational properties based on the strength of the American dollar,” says Soper. But the dip in U.S. currency, could mean a wholesale withdrawal from the Canadian vacation property market—and this could impact Canada’s recreational property market for years.

For instance, Nova Scotia and New Brunswick were extremely popular destinations for Americans prior to the 2008/2009 financial collapse. But after the global credit crunch, cottages and lake-front home prices plunged as much as 60%. Some of these markets are still in the process or recovering, almost a decade later.

 

Impact on house prices across Canada is uncertain

The impact of Trump’s election doesn’t stop there. Pre-election promises to place massive tariffs on Chinese imported goods and to “tear-up NAFTA” could mean trading-wars that could seriously impede Canada’s currently slow-growing economy.

In relative terms, trade is much more important to Canada than to the United States. The Americans can afford to be insular since they have 325 million people in their market to our less than 35 million. “Any protectionist stance from the U.S. would do significant damage to Canada,” says Soper. And any hit in our slow-growing economy could further prolong our climb out of the ultra-low interest rate environment. Worse, it could prompt lay-offs in certain parts of the country, where exports and trade help shape the local economies. This will impact localized housing markets.

Think Alberta and low oil prices, and you get the picture.

Source: Money Sense – by   November 9th, 2016

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Major mistakes investors make when buying U.S. real estate

 

There are still opportunities to take advantage of U.S. real estate, according to one veteran who has penned a guide for Canadians interested in purchasing property down south.

“The number one mistake is they don’t own it the way they need to own it based on their circumstances. For example, they may own it as a Canadian corporation; well, that’s perfectly legitimate in Canada but owning real estate in that way in the U.S. causes double taxation,” Dale Walters, author of Buying Real Estate in the US: The Concise Guide for Canadians, told Canadian Real Estate Wealth. “If you get a U.S. advisor, they may recommend they use an LLC. Hopefully the word is out now that in Canada that would cause double taxation.”

Walters’ book focuses a great deal on tax implications for Canadians who purchase real estate down south as well as information on the best way to own a property.

“The book is informational; it’s a tax book primarily. How do you own real estate in the U.S., what’s the proper way of owning it, the options, what are the tax consequences of the various ways of owning it because each way is a different tax outcome,” he said. “How do you deal with rental income and what are the tax consequences of that. You’ve got potential liability issues, how to protect yourself, non-resident estate tax potential – all of those things I cover.”

It can be daunting to purchase real estate overseas, but Walters argues there are still opportunities for all different kinds of investors; including deals for those looking to own vacation properties, become full-time landlords, and those interested in commercial properties.

There are also various markets that provide different risk profiles.

Walters believes there are two major reasons Canadians are still interested in U.S. real estate: Diversification and the availability of bargains.

“The usual markets that have market appreciation potential which would be, generally speaking, the sun belt. Southern California, Arizona, Texas, and Florida, primarily,” Walters said. “If you’re looking at some higher-risk, possibly higher opportunity, you still have places like Detroit and places like that.”

Source: Real Estate Wealth –by Justin da Rosa26 Oct 2016

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Trudeau government to close foreign-buyers loophole

A broker puts up a For Sale sign before an open house in Toronto in this 2015 file photo. (Darren Calabrese For The Globe and Mail)

Finance Minister Bill Morneau will unveil Monday new measures aimed at slowing the flood of foreign money pouring into overheated housing markets like Vancouver and Toronto, a significant federal intervention in the sector.

Ottawa will close a tax loophole that allows non-residents to buy homes and later claim a tax exemption on the sales, a government source said Sunday. The government plans to make sure the principal-residence exemption is only available to individuals who reside in Canada in the year the home is purchased.

Housing prices have soared dramatically the last few years in the Vancouver and Toronto markets, triggering a vigorous debate about the role of foreign money. British Columbia has responded by imposing a 15-per-cent foreign buyers tax on homes and collecting data on who is buying property in the province. Ottawa has also been preoccupied with the issue, with Mr. Morneau creating a working group to conduct a “deep dive” into the state of the housing market and make recommendations on possible policy actions.

Mr. Morneau will announce new measures to combat offshore speculation, including closing the loophole, in a speech in Toronto on Monday. The moves follow a Globe and Mail investigation that revealed a network of speculators flipping homes for profit and avoiding taxes by classifying them as principal residences.

Under the Canadian tax code, homeowners do not have to report the sale of any property that they designate their principal residence, and do not pay tax on the increased value – or capital gains – of that home. In order to make that designation, a homeowner, their current or former spouse or any of their children must have lived in it at some time during the year for which the designation is claimed.

However, there has been widespread abuse of the exemption by foreign buyers who claim residency either for themselves or their spouses or children simply in order to avoid paying taxes on real estate speculation. Non-resident investors must pay capital gains tax at the time of a sale.

Multiple sources have told The Globe of the widespread abuse of the primary-residency exemptions in the Greater Vancouver area. The Globe has seen hundreds of cases in which homemakers or students were listed as registered owners on multimillion-dollar residential properties.

The new measure would make the exemptions available only to home buyers who are residents at the time of purchase.

The Globe’s investigation discovered these cases usually involve a wealthy breadwinner who earns their living in another country, while parking money in Canada, through buying residential properties. Some of the homes are used by family members; others are simply left vacant.

Several expert sources told The Globe there are two ways to exploit the system – to sell those properties and pay no taxes. In the first scenario, the breadwinner claims to be a non-resident of Canada and pays no taxes here, while their spouse and children buy and sell homes registered in their names. The homes are purchased with money received as a “gift” from the breadwinner. The homes can then be sold tax-free, because the family members claim to be residents of Canada, classify the properties as their principal residences, and therefore pay no tax when they sell.

There is more widespread abuse in a second scenario, according to experts. That is when the breadwinner claims to be a resident of Canada but then doesn’t report their worldwide income to the Canada Revenue Agency, as required by law. Because they claim to be residents, they can sell Canadian properties in their name, tax-free, even if they spend little or no time in Canada.

If these homeowners make their living in China, experts said it’s difficult for anyone to determine what they actually earn, because it’s next to impossible to get tax records from that country, even though China and Canada have a long-standing tax treaty. As a result, experts say, these wealthy people get away with claiming little or no income on their Canadian tax returns, while selling homes tax-free.

Tax accountants and lawyers who handle these cases told The Globe this can be done with multiple properties, primarily because the CRA doesn’t require any resident to report any sale of a principal residence. Taxpayers simply have to fill out a form, but keep it for their own records, instead of submitting that information with their taxes.

Experts have urged Ottawa to require taxpayers to report the sale of all homes, even if they are claiming the principal-residence exemption.

“Everybody’s biggest lifetime gain is from principal residence and [Canada Revenue Agency] is saying if you are a resident it is tax free and if you are a resident we don’t worry,” one Vancouver real estate accountant said Sunday. He spoke on the condition he not be identified out of fear of repercussions.

“So the CRA pushes them into residency claims. A wife and kid are allowed to stay in Canada as a resident and as such they are entitled to tax-free principal residence and as such they don’t have to report it.”

Mr. Morneau announced in June that the government was studying developments in the housing sector, with his department working with Canada Mortgage and Housing Corp. and the Office of the Superintendent of Financial Institutions while consulting with provincial and municipal officials.

In a bid to cool its hot housing market, British Columbia introduced a foreign-buyers tax this summer which applies to the sale of all residential properties within 22 communities of metro Vancouver.

The levy applies to buyers who are not Canadian citizens or permanent residents, and corporations that are either not registered in Canada or are controlled by foreigners, and adds $300,000 to the purchase of a $2-million home.

The CRA says it completed nearly 2,500 audits related to real estate in B.C. and Ontario between April, 2015, and June, 2016, and that the agency plans to do as many or more next year.

Source: SHAWN MCCARTHY AND KATHY TOMLINSON

OTTAWA and VANCOUVER — The Globe and Mail

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Tax implications for selling a U.S. property

I’m considering selling my property in the U.S. I know I’ll need to pay capital gains on the appreciated value but do I claim the gains in U.S. or Canadian currency?

—Paul and Barb, Fort McMurray, Alta.

Timing is everything, in both comedy and taxes. According to Philippe Brideau, spokesperson for the CRA, both the cost of the property to buy and the proceeds of the sale must be converted into Canadian dollars using the exchange rate at the time of each transaction. You then report the capital gain, or loss, on your tax return based on “the difference between those two Canadian dollar amounts.” But the CRA isn’t the only tax collector to consider. The U.S. also cares about that property sale, explains Kim Moody of Calgary-based Moodys Gartner Tax Law. “A Canadian needs to first report a gain or loss in the U.S. by filing a U.S. tax return—form 1040NR—and paying any applicable U.S. taxes.” Expect to pay a withholding tax to the Internal Revenue Service, which you claim as a foreign tax credit on your Canadian tax return. Now, if this is a place in the sunny south, I hope you get to enjoy one last season down there.

Source: MoneySense.ca – Bruce Sellery February 2016

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Suspicious transactions tied to foreign buyers

Vancouver-based banks reported more suspicious mortgage applications coming from mainland China than any other country.

Banks are required to report any suspicious activity to the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), and the Globe and Mail received that data through an access of information act. It shows that Vancouver banks reported suspicious transactions originating from mainland China 17 times more often than transactions originating from any other country.

According to the Globe’s findings, financial institutions in Vancouver, Richmond, West Vancouver, and North Vancouver, reported more than 8,600 suspicious transactions to FinTRAC between January 2012 and July 2015.

Of those transactions, 5,895 came from unknown origin and 1,660 were made by Canadian citizens.

Of the remaining 1,045 flagged transactions, 83% (865 reports) came from mainland China.
These reports are purportedly triggered when the sum is larger than $10,000, when third parties send frequent wire transfers to clients, or when multiple deposits from someone other than the account holder are made.

Attorney Christine Duhaime told the Globe that while it could not be determined whether the incoming suspicious funds were used to purchase real estate, one could “surmise pretty accurately that if the funds are from China and involve large volumes, they are for real estate purchases, because there is not much else foreign nationals from China buy in Canada that would trigger a [suspicious transaction report].

Potential money laundering in Canadian real estate – including from China – has been a topic of growing interest.

The FinTRAC data publication comes on the heels of a recently released CMHC report on the amount of foreign condo investment in Vancouver and Toronto.

Foreign condo owners own 3.5% of units in Vancouver and 3.3% in Toronto; up from 2.3% and 2.4% a year ago, respectively.

The methodology is somewhat incomplete but a step in the right direction in determining how much those major markets are being influenced by foreign money.

 

 

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White lies on loan applications creating compliance nightmares

One of the speakers at this week’s Canadian Mortgage Conference, Chris Mathers – a 20-year veteran of the RCMP and president of KPMG’s Corporate Intelligence Inc. – cautioned brokers and underwriters that trying to duck around compliance issues can lead to much larger problems down the road.

A serious problem Mathers has seen pop up recently is when the person seeking the loan is an Iranian or Syrian national, as it draws concerns from compliance in regards to potential terrorism.

“Once they see that, then compliance gets involved,” Mathers told MBN. “Meanwhile, the underwriter is trying to get the deal done. So then they ask, ‘How can I get compliance off my back? I know, I just won’t tell them the guy is from a country of interest.’”

Unfortunately, when the loan application does come under a compliance review and it is discovered that the information has been omitted, that a much greater problem is created – all because the broker and/or underwriter wanted to smooth out the process.

“The compliance rules in this country have become so draconian and onerous, that it incents people in the industry to screw around with them,” he says. ”Are they being criminals? No! They are trying to make a living.”

Mathers likens compliance to a trip to the dentist, something that no one enjoys but is a necessity.

“No one says ‘Hey, it’s the compliance guy – we’re so happy to see you!’” he says. “They are a pariah.”

And while many Canadians may view the war against ISIS as involving planes and troops overseas, it is a war that is being waged and funded right here in Canada – which makes following the rules of compliance so necessary during the loan application process.

“The money that is being brought over to this country, we need to be concerned about the provenance of that money,” says Mathers. “They are financing their operations through crime, so if any of that money ends up in Canada and is used to purchase property, then we have an issue.”

Source: MortgageBrokerNews.ca Donald Horne | 19 Nov 2015 

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When foreign buyers abandon Canadian housing: Don Pittis

A housing development south of Vancouver, where anecdotal evidence indicates foreign investors have helped push property prices higher. But as Don Pittis says, poor data on how much of the investment in Canadian real estate is 'hot money' means we may be unprepared when foreign investment slows or stops.

There is little doubt that overseas money has had an impact on the high cost of Canadian real estate.

Even the Canada Mortgage and Housing Corporation appears to have conceded the fact. In a speech this week, CMHC president Evan Siddall said that despite having poor data on foreign ownership, it was likely pushing up the price of Canadian housing.

There are two things that are less clear that may be crucial to the value of your home. The first is the size and distribution of the effect. The second is what will happen when foreign ownership dries up or withdraws.

The fact that Canada does not have a good official estimate of how much foreign money is invested in Canadian housing is a scandal. Other countries assemble the information as a matter of course.

Anecdotal evidence

In Canada, even the head of the CMHC admits he is dependent on anecdotal information, partly because without making it a legal requirement, buyers may be unwilling to divulge their ownership status.

“Most of the available information is anecdotal. And the problem is that many foreign investors may prefer to hide their ownership,” Siddall said in his speech this week.

Without an official way of gathering the data, private studies can be based on uncertain methods. They may fail to distinguish between investment by foreigners and purchases by new Canadians.

CANADA-CHINA/HOUSING

Signs with larger Chinese script outside a mansion under construction in Vancouver are the kind of anecdotal information indicating foreign money is coming to Canada seeking a safe investment. But such evidence fails to indicate whether the buyers are speculative investors or new domestic residents making a long-term investment. (Reuters)

Whether based on anecdote or private research, the conclusions are often unreliable or controversial. Most recently, a study using non-Anglicised Chinese names as an indicator of foreign money in the market was pilloried as racist.

The impact of Chinese investment in Vancouver’s red hot market is what most people imagine when they think of non-Canadian investment in domestic housing. Certainly the effect is clear in countries where they do collect that kind of data.

But anecdotal tales of foreign buyers purchasing blocks of condosmeans that overseas investors, especially those with family members in the country, would not necessarily restrict themselves to luxury homes, nor to the biggest cities.

Taking a stake

In principle, there is absolutely nothing wrong with foreign money taking a stake in the Canadian real estate market. Domestic investors do the same thing. It helps support the construction sector. It provides homes for Canadians without investment capital and homes for those whose mobile lifestyle is better suited to renting.

But as Siddall said, the exact nature of that investment makes a big difference.

“While both domestic and foreign investment activity can be speculative, foreign investment may be more mobile and subject to capital flight,” Siddall said. “This would increase volatility in domestic housing markets.”

Even if the percentage of overseas investors is small, what economists call the “marginal effect” can be large.

As economist John Maynard Keynes said, “Everything happens at the margin.” A simplified way of thinking of the principle is that if people want just a little more of something, the price goes up; if they want just a little less, the price goes down.

CANADA-TORONTO/BUILDING BOOM

There are anecdotal reports of foreign buyers scooping up Toronto condos as an investment. But there is no data to show whether that means condo prices will fall if overseas money stops coming. (Mark Blinch/Reuters)

As Siddall says, foreign speculative investment, sometimes called “hot money,” can definitely drive real estate prices up as it pushes its way into the market. And as author and portfolio manager Hilliard Macbeth told me earlier this week when I was interviewing him for another story, hot money can also have the opposite effect.

Macbeth says international hot money has the choice of any real estate market in the world. While Canada may have been the prime destination for that cash for the last several years, there is no guarantee the investment will continue.

Best to worst

“You could go from the best place to put your real estate money to the worse place, literally overnight,” Macbeth says. “They wouldn’t probably be able to sell, but they wouldn’t be putting any new money in.”

In the domestic real estate market, most of the buying and selling is among people trading one house for another, says Macbeth. Price rises, he says, happen at the margin, consisting of new Canadian (usually young) buyers entering the market and foreign investors bringing new money from overseas.

We seem to be in another one of those periods when everyone, including the CMHC, is worrying about overpriced Canadian real estate. Such worries have come and gone before without hurting the speculative value of Canadian houses.

It’s not yet clear what the trigger might be for a turn from rising prices to decline. It could be rising interest rates. It could be the effect of our aging population. It could be an anticipation of those things as potential investors think they see the writing on the wall.

But just as when markets were rising, the hot money effect of overseas investors will accentuate the fall. And without reliable statistics on how big that sector is, we have no idea how great the effect will be.

Source:  Don Pittis, CBC News Posted: Nov 12, 2015 5:00 AM ET

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What are the top U.S. markets for investing in rental properties?

Want to buy an affordable rental property? HomeUnion, an online real estate investment management firm, has just released its latest list of the top 10 U.S. markets for affordable rental properties.

“Like any other investment, the focus for SFR investors should be on long-term rate of return, and each of the markets on this list has favorable rental yields, low-cost entry points and solid, long-term economic fundamentals,” said HomeUnion CEO Don Ganguly. “Natrually, macro-economic factors such as low homeownership rates are quite favorable for SFR investing, but real estate is still all about location and finding accessible markets that have low entry points, like Cincinnati and Birmingham, or high gross rental yields, like Milwaukee.”

To create the list, HomeUnion looked at non-owner occupied properties and considered a combination of year-over-year job growth, median prices of investment properties, housing affordability and gross rental yield.

Charlotte, N.C., topped the list. It had the highest job growth of any of HomeUnion’s top 10 city, and the third-best job-growth rate of the top 55 U.S. metro areas.

HomeUnion’s top SFR investment markets

  1. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
  2. Milwaukee-Waukesha-West Allis, Wisconsin
  3. Indianapolis-Carmel-Anderson, Indiana
  4. Tampa-St. Petersburg-Clearwater, Florida
  5. Birmingham-Hoover, Alabama
  6. Jacksonville, Florida
  7. Cincinnati, Ohio-Kentucky-Indiana
  8. Baltimore-Columbia-Towson, Maryland
  9. Orlando-Kissimmee-Sanford, Florida
  10. Charlotte-Concord-Gastonia, North Carolina-South Carolina

Source: Mortgage Professional America by Ryan Smith11 Nov 2015

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