Arizona For Canadians: 4 Key Elements Of Finding The Right Property

As the number of Canadians investing in Arizona real estate continue to trend upward, it is extremely important to understand the key elements of finding the right property. Even though the housing market in Arizona for Canadians is favorable, the property buying process has not changed. It is actually more important now than ever, especially since the market is so saturated with property. Knowing how, what, and where to buy can mean a profitable investment or a money pit.

What are the key elements of finding the right property in Arizona for Canadians?

Method of Acquiring the Property
Property Use
Location
Finding the Right Real Estate Company

The 4 key elements illustrated in this article are not break-through findings and have been practiced for as long as people have been buying property. The challenging part is being able to combine the knowledge of the market with understanding which method should be used acquire the property. This article will provide a clearer picture into the how, what, and where of finding the right property in Arizona for Canadians taking a step forward and investing outside their home country.

Arizona for Canadians: Method of Acquiring the Property

The first key element is to determine which method will be used to acquire the property. Financing or Cash? With the recent tightening of the US credit markets, the ability for Canadians to obtain financing to purchase US real estate has limited the number of banks offering the specific program needed. According to the National Association of Realtors (NAR) 2010 Profile of International Home Buying Activity Report, 34% of potential international purchasers were unable to complete a transaction due to financing problems. Typically, the more conventional options require large down payments and are limited to certain transaction types. Some non-conventional options exist allowing for more lenient guidelines; however the trade off are higher interest rates. Although it is more challenging to obtain financing in Arizona for Canadians buying real estate, there are options available. Another method used more commonly among Canadian buyers is cash. According to that same report by the National Association of Realtors (NAR), 55% of international purchasers paid cash. The majority of Canadian buyers use cash because it provides flexibility and is difficult to obtain financing. There are advantages and disadvantages to each method; however, it is important to pick the one that best fits the investment objective.

Arizona for Canadians: Property Use

Once the decision has been made on how to acquire the property, the second element of finding the right property in Arizona for Canadians is to determine the best use for the property. There are really only two main options; second home or investment. According to the previously mentioned report by the NAR, 22% of all international buyers purchase their property as a vacation home for family and friends compared with 14% that use it as an investment. The use of the property will determine what type of property to acquire. Those looking to use their property as a vacation home are probably looking for a little nicer property and possibly willing to spend a bit more for it. For investment purposes, it is all about cash flow. These properties are typically your older homes or multi-family properties. How the property is going to be used sets the stage for what a Canadian buyer’s strategy is.

Arizona for Canadians: Location

Once the use of the property is decided, the third element is determining the best location. The reason that the use of the property is so important when looking at location is that some areas of Arizona cater more towards vacation homes and other areas are more advantageous for investment properties. The popular vacation destinations are in resort-like areas, typically close to golf courses. Properties in these areas tend to sell for more, since the areas are more desirable. A few examples of these locations are North Scottsdale or Fountain Hills. If one is looking for investment properties, then prime locations are lower priced homes with a high rent demand. These are typically located closer to the city. Examples are Tempe (near Arizona State University) or North Phoenix.

Arizona for Canadians: Finding the Right Real Estate Company

The final element is finding the right real estate company. This may seem like a daunting task, since there are so many. Why is it important to choose the right real estate company? Look at what could happen if the right company is not chosen. Mis-representation, lack of market knowledge leading to buying a property in the wrong location, paying too much for a property, not identifying what property type that best meets the buyers needs…the list goes on and on. So, how is someone unfamiliar with the Arizona market supposed to find the right real estate company? There are several ways to locate real estate companies operating in Arizona. One good way is to speak to your local real estate agent in Canada. They may work with a larger agency that has branch offices throughout North America or have other buyers who have purchased property in Arizona. This is a great way to get feedback on the buyer’s personal experiences with these companies. Also, make sure that any company you work with has a good rating with the Better Business Bureau and Arizona Association of Realtors (AAR). Do the homework. It is much easier to do a little work upfront rather than deal with a potential issue later.

This article has illustrated the 4 key elements in finding the right property in Arizona for Canadians looking to take advantage of this incredible real estate market. There is no guarantee of a completely smooth real estate transaction even after following the guidelines set forth in the previous paragraphs. However, following the advice of this article will allow Canadian buyers to minimize the potential issues that could arise and be prepared to deal with them so that they do not disrupt the end result…finding the right property in Arizona

For more information, contact us today!