Last Updated on October 24, 2023 by David Kitai
Alain Forget helps Canadians buy property in the United States. The head of sales and business development for RBC Bank USA works exclusively with Canadian homebuyers and real estate investors to help them meet investment goals and personal dreams by purchasing property south of the border.
At the Canadian Real Estate Wealth Investor Forum on August 13th, Forget will be sharing his insights around property investments in the United States. He says that even as the COVID-19 crisis drags on in the U.S., Canadian investors with a longer time horizon have a huge opportunity to acquire a winter home in markets where the base drivers of demand aren’t going away any time soon. He highlighted RBC Bank USA’ unique capacity to furnish U.S. mortgages backed by Canadian assets and provide, most crucially, a holistic advisory voice for Canadian homebuyers making their first investments stateside.
“In our presentation we’re going to show Canadians, the opportunities for them to buy U.S. properties,” Forget says. “The U.S. has a lot of markets are very affordable compared with the metro markets around Toronto, Montreal, and Vancouver. In the Sunbelt states, there’s a lot of very affordable buying opportunities that offer a great lifestyle and weather. There’s also steady rental opportunities in these markets. Buyers using these properties as a seasonal home can rent them out and because the high demand for seasonal rentals, just renting for a few months during high seasons can cover most of property’s carrying costs for the full year.”
Forget says that the key to achieving that goal is to make the right deal. He says that RBC Bank USA has put together a suite of offerings, including a team of U.S. mortgage specialists able to help Canadian investors navigate through the slower, sometimes more difficult U.S. mortgage process. As a lender, they’re able to provide the right solution, but Forget says RBC’s service to investors is deeper than that. As a national residential lender serving Canadians only, RBC Bank USA has built a network of external cross border experts investors can pull from to provide legal, tax, and real estate advice. The bank itself boasts the staff and expertise to tackle issues of financing, banking, and currency exchange.
It’s in currency exchange, Forget says, where RBC Bank USA can be of real help. While RBC Bank USA assists Canadians with all range of property purchases south of the border, Forget cites the example of a $400,000 USD four bedroom home in Arizona or Florida. With the Canadian dollar relatively weak against the greenback, though, that prime opportunity amounts to almost $600,000 CAD. Forget says that an RBC Bank USA mortgage is designed to address this, covering up to 80 per cent of the purchase price on a residential second home in U.S. dollars. The 20 per cent down payment, Forget says, can even be pulled from a home equity line of credit on a Canadian purchaser’s property.
Not only can the 80 per cent USD mortgage make for a real savings, Forget says that Canadian investors should know their U.S. mortgage is fully opened. This means that they can lock in a 10-year term at a historically low rate, currently around three and a half per cent. If the Canadian dollar rebounds to at or near parity, they can pay part or all of the mortgage without any prepayment penalty.
Forget, who lives in Florida, says that even though the news coming out of the Sunbelt around COVID-19 cases isn’t great right now, investors with any serious time horizon shouldn’t balk. He says a lot of Canadians are already moving to purchase within the year and the U.S. domestic rental market is strong enough to support those purchases.
There’s a ticking clock, too. Forget says that most of these property markets haven’t seen a significant dip because of COVID-19, largely due to a restriction in supply that’s met falling demand. He’s seen, though, a significant amount of capital waiting on the sidelines to be deployed in home purchases as soon as disease and economic numbers stabilize. This could well cause an uptick in prices that will push some of these properties out of reach for investors. Now may be the moment to grab the opportunities on offer.
Forget is presenting at the Canadian Real Estate Wealth Investor Forum to show investors interested in these opportunities that they have a support in RBC Bank USA He and his team are dedicated to serving Canadians as they move to achieve the goal of purchasing a U.S. property. He’ll be talking about the sort of opportunities mentioned in this article, as well as the prospects for investors looking to purchase pure investment properties in the U.S.
“If investors are considering an opportunity to buy U.S. real estate, RBC Bank USA is already there to help them,” Forget says. “We can help them get financing and understand all the cross-border home investment issues that we address every day. We have a network of professionals that can help the Canadians get answers to their legal, tax, and estate, questions. Over the last 16 years, we have specialized to work only with Canadians so we developed a network of those professionals that can provide advice, guidance, and solutions to understand the issues from a real estate perspective, from a financing perspective, from a currency exchange perspective, and from a legal and tax perspective because you will encounter all of these hurdles when you’re buying an asset in another country.”
To learn more from Alain Forget and other top thinkers in the real estate space register for the Canadian Real Estate Wealth Investor Forum here.
David Kitai is currently a writer for Wealth Professional Canada Magazine. He is a content specialist under the Key Media publishing company. He’s a graduate of the Master of Journalism program at the University of British Columbia.
David is a journalist with experience in magazine editing, radio production, and international reporting in Toronto, Vancouver, and Tbilisi. He loves wine and cooking, and is always looking for a new recipe.
