If you’re a Canadian real estate investor, you’ve probably heard whispers about the US market. Maybe you’ve wondered if the grass really is greener on the other side of the border.
Here’s the truth: many Canadian investors are finding better opportunities in the US. Lower purchase prices, higher cash flow, and professional property management that actually makes sense financially. Let’s break down what you need to know.
The Numbers That Got Canadian Investors Interested
Picture this: you’re buying properties in the Greater Toronto Area for $300,000 or more. Then someone shows you homes in the US that cost one-third of that price while generating double the returns.
That’s exactly what happened to Andrew Kim, who started investing in Ontario back in 2010. When he moved to the US for his tech business, his business partner opened his eyes to a completely different way of investing.
The game-changer wasn’t just the lower prices or higher returns. It was seeing property management as a regular line item in the budget—and still making money after all expenses. This concept barely exists in the Canadian market, but it’s standard practice in the US.
Book Your Strategy CallWhat Makes US Rental Properties Different
The US single-family rental market operates differently than what most Canadians are used to. Here’s what stands out:
Cap Rates Actually Matter
In Canada, especially in hot markets like Toronto or Vancouver, investors often fund properties out of pocket every month. They’re betting on appreciation to make up for negative cash flow.
In the US, the focus is on cap rates—the returns you get after all operating expenses. Properties are expected to generate positive cash flow from day one.
Professional Management Is Built Into the Model
Canadian investors often try to self-manage or skip property management to save money. In the US, professional property management is a standard operating expense that’s already factored into the numbers.
This means you can invest remotely without constantly dealing with tenant calls or maintenance issues.
It’s a Real Asset Class
US single-family rentals are recognized as a legitimate institutional asset class. Major REITs, private equity firms, and hedge funds pour billions into this sector. That kind of institutional money doesn’t show up without serious stability and predictability.
The Biggest Roadblocks (And How to Get Past Them)
Figuring Out Where to Invest
The US is huge. How do you pick the right market when you’re sitting in Toronto or Vancouver?
Many investors freeze up trying to decide between different states and cities. They hear conflicting information and end up doing nothing.
The key is focusing on fundamentals: job growth, population trends, and landlord-friendly laws. The Sunbelt states (think Florida, Texas, Arizona) have been popular for good reason. Some Midwest markets also offer opportunities, though you need to be selective.
Here’s what matters: don’t pick a location just because it’s closer to drive to. Distance doesn’t matter when you have proper systems in place.
Entity Setup and Tax Confusion
This is where most Canadians get stuck. You’ll hear wildly different advice from different professionals. Setup costs range from a few thousand to over $10,000, and nobody explains what you’re actually paying for.
You need a structure that balances three things:
- Tax efficiency for both Canada and the US
- Liability protection for your personal assets
- Something lenders will actually work with
The good news? Once you understand the framework, it’s not as complicated as it seems. You just need guidance from someone who actually knows both sides of the border.
Asset Management vs Property Management
Most investors don’t understand the difference between these two things. It’s a critical distinction.
Property managers handle the day-to-day: collecting rent, fixing toilets, finding tenants. They’re important, but here’s the thing—if you only have a property manager, your portfolio will look exactly the same in ten years.
Asset managers take care of everything else:
- Setting up your legal entities properly
- Managing your cross-border tax strategy
- Tracking your books and financials
- Identifying refinancing opportunities
- Finding new properties to grow your portfolio
- Monitoring market rents and property values
Think of it this way: property managers keep your current properties running. Asset managers grow your wealth.
Appreciation: The Canadian Reality Check
Here’s where Canadian investors need to adjust their expectations.
If you’ve been investing in Toronto or Vancouver, you’re used to massive appreciation. Properties jumping $100,000, $200,000, or more in a single year. Some investors build entire strategies around refinancing after a year to pull out equity.
US markets don’t work that way. Appreciation is steady and modest. You’re not going to see wild year-over-year gains.
But here’s why that’s actually good: predictability is valuable. US single-family rentals give you steady rent increases, gradual appreciation, and minimal volatility. You’re not riding a roller coaster hoping to time the market perfectly.
Canadian markets are exciting when they’re going up. But right now, many properties are worth the same or less than they were two years ago. Meanwhile, investors have been funding negative cash flow month after month.
What About Politics and Landlord Rights?
This matters more than most investors realize.
Republican-leaning states tend to be more landlord-friendly. Democratic-leaning states tend to favor tenant protections. After recent elections, much of the US map is red, which generally means better conditions for property owners.
Don’t expect blue states to suddenly become investor-friendly. They’ll likely move further toward tenant protections. But red states will probably maintain or strengthen their support for property owners because they’re actively competing to attract investment capital.
This creates a clear contrast with places like Ontario, where landlord-tenant tribunals and regulations consistently favor tenants. It’s one of the main reasons Canadian investors look south.
The Foreign Exchange Question
Canadians worry a lot about foreign exchange before investing in the US. Then something funny happens: the moment they buy a property, they completely flip their perspective.
Suddenly, they’re hoping the Canadian dollar drops and the US dollar rises. Why? Because it increases the value of their US-held assets.
Exchange rates matter, but they shouldn’t stop you from investing if the fundamentals make sense. Most long-term investors end up ahead regardless of short-term currency fluctuations.
Is US Investing Right for You?
US real estate investing isn’t for everyone, but it makes sense for many Canadian investors, especially if:
- You’re tired of negative cash flow properties
- You want investments that pay you instead of costing you money
- You’re looking for steady, predictable returns
- You’re frustrated with tenant-friendly regulations in Canada
- You want to diversify beyond Canadian markets
The key is going in with realistic expectations and proper guidance. Don’t try to apply Canadian market strategies to US properties. Understand that it’s a different game with different rules.
The investors who succeed in the US market are the ones who take time to learn the system, set up their entities properly, and work with people who understand both sides of the border. Skip those steps, and you’ll waste time and money figuring things out the hard way.
Book Your Strategy CallFrequently Asked Questions
Yes, Canadians can absolutely buy rental properties in the US. You’ll need to set up proper legal entities (usually an LLC), establish US bank accounts, and understand cross-border tax implications. Many Canadians successfully invest in US real estate and find better cash flow opportunities than in Canadian markets.
The biggest difference is cash flow expectations. US rental properties typically generate positive cash flow from day one, with professional property management included in the budget. Canadian markets, especially Toronto and Vancouver, often require investors to fund properties out of pocket monthly while waiting for appreciation.
Sunbelt states like Florida, Texas, Arizona, and others in the southern US are popular because they offer job growth, population increases, and landlord-friendly laws. Some Midwest markets also provide opportunities. Focus on states with strong economic fundamentals and landlord-friendly legislation rather than just proximity to Canada.
Setup costs typically range from a few thousand dollars to over $10,000, depending on complexity and who you work with. You need to balance three factors: tax efficiency for both countries, liability protection, and lender-friendly structures. Working with professionals who understand both Canadian and US requirements is essential.
No, US properties have much more modest appreciation than hot Canadian markets. You won’t see properties jump $100,000+ in a year like they sometimes do in Toronto or Vancouver. Instead, US single-family rentals offer steady, predictable appreciation with consistent cash flow. The focus is on stability rather than dramatic gains.
Property managers handle day-to-day operations like rent collection, maintenance, and tenant placement. Asset managers take care of everything else: entity setup, tax strategy, bookkeeping, financing, tracking equity, and portfolio growth planning. Property managers maintain your properties; asset managers grow your wealth.
No, distance shouldn’t be your primary consideration. Invest in markets with the best fundamentalsu2014job growth, population trends, and landlord-friendly lawsu2014regardless of driving distance. With proper property and asset management systems, physical proximity doesn’t matter. Remote investing is built into the US rental property model.
Exchange rates matter when you’re converting Canadian dollars to buy properties, but most long-term investors end up ahead regardless of short-term fluctuations. Interestingly, after buying US properties, you’ll actually benefit when the US dollar strengthens against the Canadian dollar because it increases the value of your US-held assets.
