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Arizona Investment Properties And Buyers From Canada!

I‘ve been surprised by the prices of investment properties in Canada, especially when compared to those of Arizona investment properties.

Certainly with what has taken place in the US, and in particular places like Arizona, one can expect there to be disparity among home prices. Yet, having looked at what an investor can purchase in Canada, versus what an investor can purchase from the pool of Arizona investment properties, I highly recommend that Canadian investors take a hard look at what is possible in the states with Arizona investment properties.

arizona investment properties | stars and bars and maple leaf

Canadians: Property prices got you down? Time to look at Arizona investment properties!

However, investors should not use price as a sole indicator of value. Price and value are 2 different things regardless of what your real estate agent would have you believe. Real estate is only worth what someone else is willing to pay, or perhaps what a seller is willing to accept if the property has become a burden.

Really the value to an investor is simply this: How much free cash flow can I generate if I put my cash into this property? That’s it. An investor looks for cash flow. This is not to be confused with a speculation or “flipping” as its referred to in the market. Flipping a property is all about finding someone else who will pay more for the property than you did. Given the fact that the market has been beat up, cash flow Arizona investment property is where you want to be.

Investors want cash flow because it allows the property to generate a usable income. Having cash flow allows an investor more freedom, multiple exit strategies, and the ability to accelerate the return on invested cash. So when an investor looks at “price”, what that investor is really doing is looking for ways to generate the highest amount of free cash flow possible from the property.

Canadian properties when compared to Arizona investment properties, put the Canadian investor at a disadvantage largely due to price. Let’s say you are a Canadian investor looking to put 100k to work in an investment property. If you take a look at the chart below, it becomes clear that it would be nearly impossible to put that cash to work in any of the cities listed below without borrowing money.

Average Canadian Home Prices By City | 2010
Vancouver, BC $638,000 + 18.9 %
Toronto, Ont $409,000 + 19.0 %
Calgary, Alb $382,000 + 5.5 %
Ottawa, Ont $324,000 + 11.3 %
Montreal, Que $284,000 + 11.1 %


 
As telling as this chart is, when an investor factors in other costs like property tax, the high cost of  housing in Canada only begins to show. However, when the prices in Canada are compared to prices of Arizona investment properties, small sums of investable cash may generate double digit returns and give the buyer the potential for appreciation as the US economy turns!

Lets now take that same 100k and see what happens when an investor decides to put it to work in Arizona. Click to view an example of an Arizona investment property that can produce a solid return on investment.

In this example, the Canadian investor would purchase the home outright for $99,750, when the currency exchange rate is favorable (like it is now… near parity), with the help of  the fine folks at Arizona Investment Property by Clear Vision. The investor now has control of the property and therefore can make all relevant decisions with autonomy. Clear Vision would then recommend property management, and make formal introductions to relevant service provides so that the investor can operate from the comfort and convenience of home!

Now lets look at the numbers… This property would rent for around $950.00 per month. With the purchase price being $99,750 plus 1% currency exchange rate the Canadian investor is in the property at $100,747. Assume it takes 1 month to rent the property, which means the investor collects 11 months rent for the year. So lets calculate the cash on cash return:

Cash on cash return% = (total income ÷ purchase price) × 100 so

($10,450 ÷ $100,747) × 100% = 10.3% before taxes and depreciation… Which depending on how the deal is structured can for the investor and add to the return.

Further, the Canadian property investor has the potential for appreciation in both price and currency rate as the US economy turns around.

Now that you have seen an example and gotten some information, learn how Arizona Investment Property by Clear Vision can help you solidify your portfolio today with the addition of Arizona investment properties!

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Arizona Real Estate Market November 19, 2010 at 1:15 am

Jason this is an excellent article. Thank you for taking the time to educate and explain this information.

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