Canadians investing in Buffalo, NY Properties
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Thread: Canadians investing in Buffalo, NY Properties

  1. #1
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    Canadians investing in Buffalo, NY Properties

    Hi All,
    I am canadian living in Toronto and recently heard lot of good things about the rental income on cheap Buffalo, NY properties. I am exploring the market and thought of taking some advice and guidance from the experts here.

    I am particularly looking for the properties in and around University area. That way I can rent the properties to students and those properties will be in demand all year around.

    The questions I have are:
    1. How do we file and get approval for mortgage? What banks in US will be giving mortgage to Canadians?
    2. Can someone guide me on how much income tax we will be paying on the income?
    3. What about property tax?
    4. Any particular reference of a good property manager and real estate agent?

    Thank you all in advance.

    Harnit


  2. #2
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    I have some rental properties in Buffalo.

    1) Good luck with a mortgage. You likely won't get one. You can get a HELOC off your property in Canada, but it's almost impossible to get a mortgage on a property in Buffalo for a property you aren't going to live in.
    2) You will be paying income tax based upon how much you make. If you rent a place for $1,000 a month, you won't pay much if any taxes.
    3) Property taxes, along with water will be paid by you. Usually it's about $1,500 a year for a $50,000 house.
    4) You can PM me for my agent and property manager.

  3. #3
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    Hello iherald,
    Thank you so much for taking out time to help me on this.

    If mortgage is not possible then I need to think about searching for cheaper properties as having so much cash in hand will be a problem.

    Also, you cannot write off the property tax from your income tax as you don't stay there? This is what we do here in Canada, right?

    I will PM you for agent and property manager.

    Thank you again!

    Harnit


    Quote Originally Posted by iherald View Post
    I have some rental properties in Buffalo.

    1) Good luck with a mortgage. You likely won't get one. You can get a HELOC off your property in Canada, but it's almost impossible to get a mortgage on a property in Buffalo for a property you aren't going to live in.
    2) You will be paying income tax based upon how much you make. If you rent a place for $1,000 a month, you won't pay much if any taxes.
    3) Property taxes, along with water will be paid by you. Usually it's about $1,500 a year for a $50,000 house.
    4) You can PM me for my agent and property manager.

  4. #4
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    Since someone else may read this, you can write off all your expenses from your US taxes. If it were me, and I was serious about this, I'd invest about $1200 to incorporate a NY company. That just protects your interests. Then the corp owns the houses and fills out taxes and can write off all your expenses.

    What you can do is get a loan here in Canada and invest it in the US. The interest should still be deductible against your personal taxes since you are using it to invest. I say should because I'm not an accountant.

    Do research on the mortgage issue, I'd love to find a way, but so far I haven't.

  5. #5
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    Quote Originally Posted by harnit View Post
    The questions I have are:
    1. How do we file and get approval for mortgage? What banks in US will be giving mortgage to Canadians?
    2. Can someone guide me on how much income tax we will be paying on the income?
    3. What about property tax?
    1. Using existing home equity [HELOC or if you can draw funds from your existing mortgage] is the way to go. You'll have a hard time finding a US bank to grant you a mortgage and Canadian banks will not grant mortgages on non-Canadian properties. Using your existing equity will give you the funds needed to buy a Buffalo property, but the lien is on your Canadian house.

    2. That depends on your marginal tax rate. You'll pay US state and federal tax on the rental income at their rates [I don't know US rates off the top of my head]. When you file your Canadian income tax return you will claim the income made in the US but will also claim how much income tax you paid to the US government. Canada has a tax treaty with the US to avoid double-taxation so you will only be taxed on the difference between your marginal tax rate and the taxes you already paid.

    3. Property taxes depend on the location and the individual property. You will have to look at how much property taxes are in those neighbourhoods. You should be able to see how much the property taxes are for properties you want to purchase. This is publicly accessible information. You should be able to find it here: http://www.tax.ny.gov/pit/property/

    I have no answers to your 4th question. Good luck.

  6. #6
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    Hi Canadian & iherald,
    Thank you so much for your detailed response. I will definitely keep these points in mind and move forward accordingly. Really appreciate your help and time on this.

    iherald, I am not able to send you a PM. Is there any setting that you need to change?

    Harnit



    Quote Originally Posted by Canadian View Post
    1. Using existing home equity [HELOC or if you can draw funds from your existing mortgage] is the way to go. You'll have a hard time finding a US bank to grant you a mortgage and Canadian banks will not grant mortgages on non-Canadian properties. Using your existing equity will give you the funds needed to buy a Buffalo property, but the lien is on your Canadian house.

    2. That depends on your marginal tax rate. You'll pay US state and federal tax on the rental income at their rates [I don't know US rates off the top of my head]. When you file your Canadian income tax return you will claim the income made in the US but will also claim how much income tax you paid to the US government. Canada has a tax treaty with the US to avoid double-taxation so you will only be taxed on the difference between your marginal tax rate and the taxes you already paid.

    3. Property taxes depend on the location and the individual property. You will have to look at how much property taxes are in those neighbourhoods. You should be able to see how much the property taxes are for properties you want to purchase. This is publicly accessible information. You should be able to find it here: http://www.tax.ny.gov/pit/property/

    I have no answers to your 4th question. Good luck.

  7. #7
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    Hi Guys,
    Hope all of you are doing well.

    I am looking into properties in Kaisertown, NY. This will be my first investment property in Buffalo, NY. I am very much interested in the investment in this city. Do you think it is a good idea to buy a property in this part of Buffalo?

    The property falls on Weiss St. I had a look at the property and it is in a very good condition. Do we get good tenants in this area though? How much are we looking at for the 2 unit property?

    Highly appreciate your help & time.

    Thank you!

    Harnit

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  9. #9
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    Thank you so much, Eclectic12. Not sure if this is to make me little careful about the market or tell me how attractive it is.

    I am focusing on Buffalo for now. Just looked at this house in Kaisertown yesterday and wanted to check before I go ahead and put an offer on it.

    Also, does anyone know a good property manager in buffalo? I heard lot of horror stories with property managers there. Will appreciate the reference of a handyman as well.

    Thank you!

    Harnit

  10. #10
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    Quote Originally Posted by harnit View Post
    Thank you so much, Eclectic12.
    Not sure if this is to make me little careful about the market or tell me how attractive it is.
    A reminder for any readers that while the US is similar in some respects, in others it is quite different - due diligence as well as expert advice is recommended.

    Whether it's a cautionary tale or endorsement is up to the reader ...


    Quote Originally Posted by harnit View Post
    ... does anyone know a good property manager in buffalo? I heard lot of horror stories with property managers there.
    Will appreciate the reference of a handyman as well.
    ... sorry ... no name or experience.


    Cheers

    Last edited by Eclectic12; 2014-09-04 at 11:14 AM.

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