When Canadians look to buy a vacation property, it's usually about the weather. Most Canadian cities get extremely cold in the winter, and endure a miniature Ice Age's worth of snow. Meanwhile, Florida's natural beauty—its white, sandy beaches, its gorgeous coastline, and its sunny, warm winters—is the stuff of legend, but the summer here can get a bit too hot.
This all means that Florida and Canada are something of a match made in heaven. Living in Florida during the winter and in Canada the rest of the year lets many Canadians avoid the cold and beat the heat, giving them the best of both worlds. It's no surprise, then, that an estimated half a million Canadians own property in Florida!
But it's not easy to buy real estate outside your country, and there are a lot of factors that Canadians need to consider before they invest in the "Snowbird" lifestyle.
While you can certainly move to Florida permanently, and start paying U.S. taxes, most Canadians find it's best to avoid the taxes and keep their access to health care in their home country.
You can generally stay in the U.S. for up to six months at a time without a visa, provided that it doesn't look like you're trying to live here permanently. Be respectful of this limit, though, because you risk losing access to the U.S. (and your beautiful Florida vacation home!) entirely. Also be aware that this is a rolling total out of the last six months, so try not to have been in the U.S. for more than 180 out the last 365 days.
The other side of the coin is how long to spend back home. To avoid losing healthcare, you generally want to spend six months out of every year in your home province (though a few provinces like Ontario have slightly more generous rules). So altogether, most Canadian snowbirds are looking to live in Florida for less than six months per year.
So the question is, what will you do with your property during the time you're not living in it? Is it an investment, an income property, or both? You may not want to rent out your luxury Florida home to a stranger. But if you have a more modest property, it could be nice to make a little money off it when you're not using it.
Be aware, however, that you'll have to pay U.S. taxes on any rental income you make from your Florida home. And if you decide to sell it one day, you'll have to navigate U.S. capital gains taxes.
The Buying Process
Buying a home in Florida, as a Canadian, will be a little more difficult than buying a home in Canada. The biggest hurdle you'll have to overcome is getting financed: without a U.S. credit history, it will be difficult to get good terms on a mortgage. You could have an outstanding Canadian credit history and still be asked for 30% down on your home in Florida.
Many Canadians, especially those looking for luxury properties, are able to ignore the financing problem because they can pay cash. Some even finance their homes in Canada in order to get the cash they need to buy in Florida. This isn't always a good deal, though, because of the fluctuating values of U.S. and Canadian currency.
The other trick with buying a home in Florida is knowing how much you can actually afford. When buying a home, it's always important to account for hidden costs in order to figure out your actual budget, and Canadians unfamiliar with Florida real estate might miss a few of these costs.
First, be aware that almost all homes in Florida have Homeowners Associations and associated HOA fees. Second, you should almost certainly invest in both flood insurance and hurricane insurance for any property in Florida. And third, you'll want travel health insurance for the time you spend outside of Canada. Altogether, these costs can really add up, so don't forget to account for them.
Knowing the Market
Having good buyer's representation when buying Florida real estate is essential. Especially if you're looking to find a nice home in a gated community, you'll have trouble seeing everything that's listed. This is because many communities only want to deal with prospective buyers who have professional representation. They can better protect their residents' privacy by limiting who has access to the market.
Of course, having an expert in Florida real estate represent you will make the process much easier in a lot of ways, since you won't be local and may not be able to spend a lot of time in Florida looking for a place to buy. But a Florida real estate agent will also be able to get you access to the best communities in the state.
If you're a Canadian looking to buy Florida real estate, having a representative will make the process much easier and more effective. Get in touch for expert advice that goes well beyond this guide! Escape your next winter, and spend it on the beach!