# Canadians investing in Buffalo, NY Properties



## harnit (Dec 9, 2013)

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


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## iherald (Apr 18, 2009)

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.


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## harnit (Dec 9, 2013)

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




iherald said:


> 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.
> ...


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## iherald (Apr 18, 2009)

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.


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## Canadian (Sep 19, 2013)

harnit said:


> 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.


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## harnit (Dec 9, 2013)

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




Canadian said:


> *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.
> 
> ...


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## harnit (Dec 9, 2013)

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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## Eclectic12 (Oct 20, 2010)

Here are some links with info that might help.

http://www.moneysense.ca/property/be-an-american-landlord-2
http://www.landlordrelief.ca/2012/0...he-bad-and-the-very-very-ugly/comment-page-1/


Cheers


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## harnit (Dec 9, 2013)

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


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## Eclectic12 (Oct 20, 2010)

harnit said:


> 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 ... :biggrin:




harnit said:


> ... 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


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## harnit (Dec 9, 2013)

Hi All, 
I finally bought a property in University Heights area (very close to UB South Campus). I need a property manager for this milti-family property. Any recommendations? How much do they normally charge? 

Harnit


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## johnlena (Sep 6, 2014)

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## canadianrookie (Mar 3, 2015)

*Tempted but...*



harnit said:


> Hi All,
> I finally bought a property in University Heights area (very close to UB South Campus). I need a property manager for this milti-family property. Any recommendations? How much do they normally charge?
> 
> Harnit



Hi Harnit,
I've been considering doing the same for a long time now. I friend of mine who's been to Buffalo a few times told me to stay away from there as it is a dangerous place, full of crime. She said even if I buy a house and physically lock it up just to keep it as an investment it will still be a bad idea as criminals will wreck the propery (they'd brake down the house to take as much as they could from inside). She said when she drives down to SC or FL also her husband feels unconfortable to stop the car in Buffalo to fill gas. I was on Trulia(real state site) this week. I then went to Google Maps to take a look at some places I liked. The streets looked like abandoned, houses had sheets of wood where there was supposed to be their front doors and where we could read in sprayed paint the houses' numbers. It looked like a town where people scaped from a war, abandoned. I'd like to know about your experience so far after acquiring your property. Do you feel ok driving around the streets of Buffalo? How was the purchase process? Are you doing any reno right now? Have you found any tenants yet? I can't resist the fact that the area is so close to Canada and affordable. I really want to buy something there but I keep telling myself to be logical and not emotional. Please help, I'd like to hear from someone who has done it, the rest is just speculation. Thank you!


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## tonka27 (Mar 10, 2015)

Harnit, how is it going with the Buffalo property? Success? Problems? Regrets?


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## TrevorPLambert (Sep 14, 2015)

*Cross Board Tax planning*

A great read for planning to purchase or even if you own property in the US.

http://www.canadianrealestatemagazine.ca/infocus/cross-border-tax-planning/


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## Samromanov (Jan 12, 2018)

*Canadian investing in Western New York*

Hello,
My name is Sam and I am also very interested in real estate investment properties across the border. If you or anyone who has already done it successfully can connect me with the right people that will be greatly appreciated. I am from Niagara Region Ontario.

Cheers to all 

Sam


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## Samromanov (Jan 12, 2018)

*Buffalo area properties*

Hi,
What is your contact information.
Regards
Sam








iherald said:


> 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.
> ...


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## Eclectic12 (Oct 20, 2010)

Canadian said:


> ... *2.* That depends on your marginal tax rate.
> You'll pay *US state and federal tax on the rental income* at their rates ...


This is where checking first can be important ... some US cities, including NYC charge income tax. 
I am pretty sure Buffalo does not.


Cheers


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## can_84 (Jul 2, 2011)

The taxes you pay to the U.S are deductible back in Canada as mentioned above. 

I've contemplated buying in Buffalo or even Detroit but the management aspect of it kept me from entering. From my research you can make a better return in certain U.S areas as the properties are cheaper thus your capital allocation is lower while your return is similar to Canada or even better. I am in Toronto so doing rentals these days makes no financial sense to me as I find most people in the business are chasing capital appreciation. To me Capital appreciation is a bonus while cash flow is the primary motive. 

I recently visited Cape Town South Africa and had a chance to look around on the rental market. It seems very profitable compared to Canada or U.S.. i am starting to think I should broaden my search and look at markets with higher return. Given that I live in Toronto Ontario being a landlord is very disadvantages because the rental laws favors tenets to the point where allot abuse the system (not to say there arent bad land lords). I would like annoys input on what they are doing given the current housing situation in Toronto.


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