It's been awhile since my last Snowbird blog update. Much has changed.
First off, the Canadian dollar is definitely killing both tourism and real estate in the United States currently and it’s hard to guess when this situation might improve.
Methinks it won’t be ‘soon.'
However the fact is when it's 30 below in Alberta it's likely 25-30 above in Arizona - so you can sit and freeze your butt off during the winter OR budget accordingly and come enjoy one of America's finest playgrounds in Arizona or California.
In the Phoenix area alone there are over 270 golf courses in and around the city of 4.5 million; with a wide variety of prices and skill levels.
If you hunt carefully you can find special deals and they DO appreciate their Canadian visitors so don't hesitate to tell them you're playing on a 'reduced' dollar and see what they come up with.
For entertainment there's a world class music or arts facility in each of the cities that make up Phoenix - including the surrounding suburbs.
From 'soft seaters' like the beautiful Scottsdale Performing Centre or Mesa Arts Centre - to downtown Phoenix’s one hundred year old beautiful Orpheum Theatre to the outdoor covered Ak Chin Theatre that holds about 25,000 people.
In a city as large as Phoenix stars from all genres visit 'weekly' - and concerts down there are often priced at about 'half' of what we generally pay here at Canadian venues. Most of the casinos have small intimate venues where you can see 'classic' bands for a very reasonable ticket price too.
For music lovers the Musical Instruments Museum in Scottsdale is a must...an extremely interesting venue with musical instruments from the beginning of time - and a beautiful intimate theatre were world class musicans play jazz, classical, folk, blues, etc..
Sports lovers can enjoy all the biggies - the Arizona Coyotes (NHL), the Phoenix Suns (NBA), the Arizona Diamondbacks (Baseball); NASCAR races; and of course college teams that draw large crowds too.
Whichever direction you drive in, around, or just outside the city you'll find rich history sites and highlights include stunningly beautiful Sedona, interesting ghost towns and some deep deep copper mines east of Gilbert.
If you're considering buying a condo or home in the area you'd be wise to talk to somebody who specializes in Canadian buyers and I highly recommend Gary Peruzinni who is the contact person who has assisted me and more than a dozen of my friends in their purchases in Arizona.
I asked Gary a few key questions including:
1. What's the current situation with Phoenix and area real estate? Has it 'recovered' from the post 2008 dip.
"The Phoenix Metro area has rebounded nicely from the initial down turn.. The correction high has not been attained. In other words we have not recovered completely as of yet however the volume of foreclosures and short sales have been absorbed.
During this correction many groups and hedge funds purchased much of the available inventory.
These properties have been entered into the rental pool. The expectation was that much of this rental property would be held until the market recovered. Conversely to the strategy expectations these properties are yielding higher rents causing very little motivation to kill the "golden goose".
These properties have been entered into the rental pool. The expectation was that much of this rental property would be held until the market recovered. Conversely to the strategy expectations these properties are yielding higher rents causing very little motivation to kill the "golden goose".
The thinking goes something like this. Why sell and lose the cash flow while properties continue to appreciate?
Due to this and a few other conditions the availability of entry level property is down hence rising prices."
2. What is the biggest thing a Canadian should know about US real estate vs Can real estate?
A. Low down payments, FHA is 3% down, VA can be a Zero (zed) down payment
B. Owners of primary residences which are financed have the opportunity to deduct from there federal taxes the interest paid for the year. That calculation is total annual interest times the effective income tax rate of the home owner.
C. There also exists a capital gain free sales window for those that have resided in the home (as their primary residence) for 2 of the last 5 years. The maximum window varies if you are married $500,000 or single $250,000. Currently there is no limit to this exemption. It can be utilized as often as one might qualify for it. If timed correctly a person could live in a home for two years lease it for two years and then sell it without tax. The property owner could have 2-3 homes in play with this strategy."
3. Any other tips or information you’d like to convey?
"Seasonal use of a property in Arizona provides so many intangibles. What to do with the time in Arizona never seems to be an issue. The cost of living and the property taxes provide for a cost effective way to enjoy some or all of the winter in Arizona. Canadians seem to have a budget for winter escape. When doing the math it very cost effective."
A few other important things you should be aware of if you’re considering visiting or buying over the winter you’d wise to know includes:
1. Know the 'legal' aspects of buying and visiting the United States. The most current up-to-date book I recommend is The Border Guide - by Robert Keats. It's updated often and you can find information on it at theborderguide.com
2. You are only allowed to be in the United States for 181 days annually - but it's a complicated formula of what counts and what doesn't when you go back and forth. Both borders are now 'sharing' information so you're wise to set up a formal system tracking your visits.
It’s not a ‘calendar’ allotment but an annual tally and it resets after you have been out of the US for 30 days.
3. The Health Care coverage you receive when leaving Canada is different in EACH Province for how many months you are allowed to be out of the country and it does NOT align with the 181 day rules so 'know you're particular rules.'
4. I highly suggest you join the Canadian Snowbird Association - snowbirds.org - it's very inexpensive and they provide constantly updated information about the US situation. They provide Health Coverage; organize special events that you can attend for updates (and meet other Snowbirds); and have been lobbying the US Government for a modification to the Days Allowed in the US - attempting to get us 240 days.
5. Get a HOME CHECKER if you buy a place down there. Mine goes in 'weekly' - brings my mail in; picks up anything that is left at the front door (menus, etc) that would be left there for months showing that I'm likely not at home; he checks various things around the place - and makes sure the water gets turned on to circulate during the 115F summer days so that pipes and toilets (seals) don't go dry and cause problems.
6. Get an A/C-Heat deal from one of the local providers. They come twice a year to make sure that your units are working properly. I also have an ADT deal that allows me to turn both on - via an iPad app - so that I know they're both working prior to my visits - and to cool the place down prior to my arrival. These past two suggestions are 'plus' items for your Insurance provider too - don't leave a home empty.
7. Finally check your cell phone 'roaming' policy and costs as you can get a huge surprise when you head home if you have used your phone extensively down there. Usually you have a roaming charge and a separate charge for 'text' usage - so again have your provider explain their costs to you - and 'each one in Canada is different.' ie. Bell, Rogers, Telus, etc.
Be aware that many laws are very different as is the culture. A sun destination is a wonderful place to wait out winter - but it’s imperative that you remember that you are in another country and their ways and laws can be dramatically different than what ours - so do your homework just in case.
