Why Canadian Investors Are Buying US Rental Properties

If you’ve ever tried to refinance a property in Canada or get financing for your next rental, you know the struggle. Even in your best income year, lenders can shut you down. That’s exactly what happened to Carlos Rodrigues – and it pushed him to move his entire real estate business from Ontario to the United States.

His story isn’t unique. More Canadian investors are discovering that building a real estate portfolio is easier south of the border. Here’s what you need to know if you’re thinking about doing the same.

The Problem with Canadian Real Estate Investing

Carlos hit a wall when he tried to refinance his personal home during his best income year ever. The answer? No dice with A or B lenders. The only option was a reverse mortgage.

That was the final straw. But the problems go deeper than one bad refinance experience:

Getting financing for each new property becomes harder as you grow
The landlord-tenant board heavily favors tenants
Property prices throughout Ontario and the GTA are sky-high
Cash Flow is nearly impossible to find
Scaling your portfolio feels like pushing a boulder uphill

Sound familiar? You’re not alone. These same issues are pushing more investors to look elsewhere.

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Why Ohio Makes Sense for Canadian Investors

After researching different markets, Carlos landed on Cleveland, Ohio. Here’s why it works:

The Numbers Are Attractive

Cleveland has about 3 million people in the greater area. Here’s the kicker – 50% of them rent. That’s 1.5 million renters creating constant demand for rental properties.

The properties themselves are purpose-built rentals. We’re talking duplexes, triplexes, and quadplexes at prices that make Canadian investors’ jaws drop.

It’s Close Enough to Manage

Ohio and Michigan aren’t that far from Ontario. You can drive there. You can fly in for a day. You’re not trying to manage properties in Florida or Arizona from thousands of miles away.

The Market Rewards Value-Add Investors

Unlike the Canadian market where you could buy almost anything and watch it appreciate for 20 years, the Midwest is all about cash flow and adding value through renovations.

Carlos bought his first duplex for $35,000 USD. After putting $60,000 into renovations, it appraised at $150,000. That’s $55,000 in equity created through the work, not just waiting for the market to go up.

Carlos’s First Deal: All the Mistakes

That first property taught Carlos everything the hard way. The project manager stole money. Contractors were unreliable. He bought in one of the roughest neighborhoods in Cleveland. Everything that could go wrong did go wrong.

But here’s the thing – he still came out ahead. And more importantly, he learned lessons that made every deal after that one smoother.

His advice? Start small. Make your mistakes on a duplex, not on a 16-unit building. The education is worth it.

The Section 8 Strategy

Carlos focuses on Section 8 housing. This is where the government pays part or all of the tenant’s rent directly to you as the landlord.

Why does this matter? Payment reliability. The government doesn’t forget to pay rent. You’re not chasing tenants for money. It’s a steadier, more predictable income stream.

This strategy works particularly well in lower-priced neighborhoods where the numbers still make sense but the tenant quality might otherwise be a concern.

Things That Can Bite You (Pay Attention)

Point of Sale Inspections

Some cities require inspections when properties change hands. The city inspector comes through and creates a list of everything wrong with the property – cracked sidewalks, stairs not up to code, holes in screens, you name it.

Here’s where it gets expensive. The city estimates the repair costs, then requires you to put 125-130% of that estimate in escrow until the work is done.

Carlos almost bought 16 townhouses for $1.2 million that would have cash flowed $20,000 per month. But the point of sale inspection found $250,000 in repairs. That meant $325,000 in escrow plus the actual $250,000 to do the work. Total: $575,000 on top of the purchase price and down payment.

He walked away. It still hurts him to talk about it, but he wasn’t ready for that level of complexity early on.

Lead Paint Rules

Old houses in the Midwest often have lead paint. There are specific procedures you must follow when renovating these properties. If you don’t handle it correctly upfront, you can face massive remediation bills later.

Location Is REALLY Local

In Cleveland, neighborhoods can change from one block to the next. You can’t just know the city – you need to know which specific streets are good and which ones to avoid.

This is where working with someone who knows the market becomes critical.

Setting Things Up Properly

Carlos spent serious money on a top lawyer to set up his corporate structure correctly. It wasn’t cheap, but it protects him and creates a foundation he can build on.

He also got an E-2 visa, which lets him conduct business in the United States legally and stay there for extended periods. This gives him credibility with contractors and partners, and makes hands-on management much easier.

Yes, the setup costs money upfront. But cutting corners here can cost you way more down the road.

The Hands-On Approach

Even with property managers in place, Carlos visits Cleveland almost every other month. Sometimes he stays for a month at a time.

Why? Because quality matters. He wants to eliminate problems for the next five years, not just slap some paint on walls. That means personally checking renovation work and making sure contractors are doing things right.

This isn’t passive investing. If you want truly passive, you might want to invest in someone else’s deals. If you want to build your own portfolio, plan on staying involved.

How Financing Works for Canadians

Here’s good news: financing exists for Canadians buying U.S. investment properties. LendCity has access to over 25,000 lenders, including specialists who understand cross-border deals.

Even better, the LendCity team includes investors who own properties in Ohio and Florida themselves. They’re not just brokers pushing products – they’re investors who understand what you’re trying to do because they’re doing it too.

Getting Started

If this sounds interesting, here’s what to do:

First, educate yourself. Talk to people who are already investing in the markets you’re considering. Carlos offers mentorship that takes you through your first property from start to finish – finding contractors, setting up entities, avoiding the mistakes he made.

Second, get your financing lined up before you start looking at properties. Know what you can afford and what the terms look like.

Third, start small. Don’t try to buy 16 units on your first deal. Get a duplex. Learn the market. Make your mistakes on a manageable scale.

Fourth, plan to be hands-on, especially at first. Visit your market regularly. Meet your team in person. See your properties with your own eyes.

The Shift in Thinking

Moving from Canadian to U.S. investing requires a mindset change. In Canada, especially in the GTA, you could buy almost anything and it would appreciate over 20-25 years. Appreciation was the game.

In the Midwest, cash flow is the game. You’re not banking on values doubling in 10 years. You’re buying properties that put money in your pocket from month one.

That means being more selective about what you buy, more thorough with your renovations, and more active in your management. But it also means you can actually scale your portfolio without fighting for financing at every step.

Is This Right for You?

u.s. real estate investing isn’t for everyone. It takes time, money, and commitment. You’ll face a learning curve. You’ll make mistakes.

But if you’re frustrated with Canadian financing, tired of landlord-tenant board nightmares, and sick of paying $800,000 for a property that barely cash flows, it’s worth exploring.

Carlos made the jump five years ago and hasn’t looked back. His Cleveland realtor contacts him weekly about new Canadian investors asking for help. The word is getting out.

The question is: will you be ahead of the curve or playing catch-up later?

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Frequently Asked Questions

Can Canadians get mortgages for US investment properties?

Yes. There are lenders who specialize in financing for Canadian investors buying U.S. rental properties. These loans work differently than Canadian mortgages, but options exist. LendCity has access to over 25,000 lenders including specialists in cross-border investment property financing.

Why are Canadian investors choosing Ohio over other US states?

Ohio offers a combination of strong rental demand (50% of Cleveland residents rent), affordable property prices, purpose-built rental properties like duplexes and triplexes, and proximity to Canada for hands-on management. The focus is on cash flow rather than appreciation, which works well for investors frustrated with Canadian market prices.

What is Section 8 housing and why do investors like it?

Section 8 is a U.S. government program where the government pays part or all of a tenant's rent directly to the landlord. Investors like it because it provides payment reliability – the government doesn't forget to pay rent. This creates more stable, predictable income streams compared to traditional tenants.

What are point of sale inspections and how do they affect deals?

Point of sale inspections are required by some municipalities when property ownership changes. The city inspects the property and identifies all needed repairs. You must put 125-130% of the estimated repair costs in escrow until work is completed, plus pay for the actual repairs. This can add tens or hundreds of thousands to your upfront capital requirements.

How much money do you need to start investing in US real estate from Canada?

Carlos's first property cost $35,000 USD to purchase plus $60,000 in renovations, so around $95,000 total. However, you also need money for legal setup, travel, inspections, and reserves. Starting with $100,000-$150,000 CAD gives you room to handle a first property plus unexpected costs while learning the market.

Do I need to visit my US rental properties in person?

While you can hire property managers, successful investors recommend regular visits, especially when starting out. Carlos visits Cleveland almost every other month and sometimes stays for a month. This hands-on approach ensures quality renovations, builds relationships with your team, and helps you understand the local market better.

What's the biggest mistake Canadian investors make in the US market?

Expecting the same appreciation-focused strategy that worked in Canada. The Midwest markets are about cash flow, not waiting for values to double. Investors also underestimate the importance of local knowledge – neighborhoods can change block by block. Working with experienced mentors and starting small helps avoid costly mistakes.

How do I find reliable contractors and property managers in US markets?

This is one of the biggest challenges for remote investors. Working with a mentor who already has established teams in your target market can save years of trial and error. Carlos offers mentorship that includes connections to vetted contractors, property managers, attorneys, and accountants he's already tested through his own investing.

Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.

Written by

LendCity

Published

December 22, 2025