Major disruptions in the Canadian real estate market could make these foreign investors one of the biggest client groups for US based real estate wholesalers in 2017.
Canadian policy makers have recently proposed and levied a barrage of savage blows against real estate investors in Canada. The National Association of Realtors has long reported that Canadians have been one of the biggest consumers of American real estate. These latest developments could create an even larger surge this year. What’s happening? What other groups of investors might it impact? How can those wholesaling real estate in the US serve them, and benefit from this trend?
The Canadian Housing Bust
Canadian authorities have been trying to cool the market for years. They have levied new taxes, made it harder to get mortgages, and have tried to manage the interest rates lenders offer borrowers. Now a whole slew of new moves could crush the viability and appeal of investing in major Canadian cities.
Among these moves is new taxes on vacant properties. If you are not living in your property and it isn’t occupied by a renter, you will be subject to an additional tax. At the same time, new rules will put rent controls on all properties in major cities like Toronto. This will cap annual rent increases at 2.5%, or less if inflation is lower. At the same time the government is supporting new apartment developments, even though overbuilding has been one of their main concerns. To put the icing on the cake, new anti-flipping and assignment rules, as well as pressure on agents is aimed at preventing investing.
It doesn’t take a genius to figure out that this has become an extremely risky environment for investors, in which they will be giving up more income, netting less, and being capped on their income and ability to resell. And so far, no one has really mastered a ‘soft landing’. So, as investors flee, and buying activity halts, there is no telling how low market values could go.
Not only will domestic property investors be wise to cash out of Canada now and redirect acquisition activity this year, but so will global investors who have said they have some $1.7 trillion dollars to put into real estate this year. Canada has long been an international favorite for its strong financial system, friendliness to investors and international businesses, and legal protections. With this changing fast, America benefits from billions more in international capital over the next six months.
How to Help
The above could be incredibly great news for US real estate investors. Those who are wholesaling and flipping houses may find thousands more clients are actively searching for deals, and capital could be even more plentiful than expected.
Real estate wholesalers can be of great service to these investors. The earlier they get started with their targeted marketing and connecting, the larger share of this boom they can hope to gain. There are a variety of ways to achieve this.
Improve your real estate website SEO with better keywords and blog posts
Obtain lists of cash buyers and private lenders
Run ad campaigns at home and abroad
Hire help who understands the differences and can help
Dominate your market with the best follow up systems
Specialize in serving these types of investors
Recruit local reps and referral agents abroad
Go visit or host real estate expos in Canada and overseas
2017 could a huge year for Canadian and international investors buying property in the United States. They are looking for opportunities to lend, flip, and rent for cash flow. Wholesaling houses to this group can be a fantastic win-win for everyone. Get out ahead of the curve and reach them first.