Last fall, I wrote about the benefits of buying property in the US sunbelt, particularly in Florida, which is currently experiencing a post-recession renaissance. Now, as the state’s economy continues to recover, more and more visitors are heading to the Sunshine State: 2014 saw a record number of 97.3 million visitors, up 3.9 percent from 2013. Canadians comprised 3.8 million of these visitors, also a record high, up 2.4 percent from the number of Canadians who visited Florida in 2013.
The growth of the tourism industry has helped to improve Florida’s economy. Florida’s popularity with both international and Canadian tourists is often chalked up to the state’s physical beauty and consistently warm weather, but as the economy expands and job opportunities abound, many Americans are now choosing the state as a permanent home due to its economic stabilization.
Statistics show that as employment continues to stabilize, Florida’s housing market will continue to bloom. Today, however, many Americans are renting properties while they slowly accrue more wealth and begin to consider home ownership again. Snowbirds currently looking to invest in the US may find themselves competing with Americans for rental properties, making buying US real estate an attractive option for some Canadians, as I postulated late last year.
Canadians contemplating a Florida real estate purchase must first decide whether or not to buy a single-family home or a condominium. Condos are a great option for many snowbirds, who may not want the responsibility of maintaining a single-family home. Condos also offer a variety of amenities, which make them particularly appealing vacation properties.
When clients begin their search for the right condominium property, experienced realtors are essential guides, alerting snowbirds to the most important considerations to keep top of mind.
A few action items to think about when purchasing
a condo include:
- Reviewing the homeowners association’s (HOA’s) financial statements to ensure its financial health;
- Determining what the HOA fees will be and how often special assessments have been levied in order to get a general idea of the building’s overall condition; and
- Carefully reading the available by-laws to get acquainted with the rights of homeowners (e.g., the ability to rent to tenants or own pets).
I also advise clients to hire a Florida-certified home inspector who can inspect both the unit and the building; the Contract for Purchase and Sale should provide buyers with an inspection period, which is an important length of time during which potential issues can be discovered and corrected. The inspection period clause also allows buyers to walk away from a purchase without losing their deposit if, based on the home inspector’s findings, backing away from the deal seems necessary.
Canadian snowbirds currently contemplating a Florida real estate purchase, whether they are considering a condominium or single-family home, are encouraged to consult with an experienced realtor and other cross border experts as early in the purchase process as possible, as a whole host of cross border real estate, tax and estate planning issues can arise for Canadians buying property in the US, including US estate tax, probate, and incapacity and guardianship issues.
Since 2014 was the fourth consecutive year in which Florida enjoyed a record-breaking number of visitors, the state’s future looks bright: as tourism booms, so will Florida’s economy, improving the housing market right along with it.