While working in academia in the past, I have had the chance to work with people from many different parts of the world. At my previous position as a software developer at a university, I had the opportunity to meet a young graduate student from Arizona. She was appalled at the cost and quality of rental units in Vancouver and regaled me with stories of cheap property and rental possibilities in Arizona, particularly the university town of Flagstaff.
It got me thinking about the possibility of owning a rental property in the states. I’m always incredibly jealous of the cheaper housing costs in (many parts of) the US. The Monopoly maniac in me drools at the thought of all the property I could own and rent out. *drool*
How would this work? Well I imagine I’d need some local input. I wouldn’t want to buy property in an area I had zero connection with, so I’d probably canvas my friends and get some sense for the different markets. I’m a big fan of renting to students (our current renters are students!) so I would seriously consider an area like Flagstaff, which has a stable university. With a university town, I would feel confident that there would always be an incoming population that needed housing.
My master plan would go something like this: For a property intended to be a student rental, I would definitely get a cheaper fixer-upper. I remember my early student days and having beautiful stainless steel appliances was NOT on my list of must-haves. Instead, I would focus on making the unit clean, super functional, and easy to maintain.
After renting it for a few years to re-coup costs, refinancing might be a good idea. We refinanced our first condo in order to take advantage of lower interest rates. I would probably want to use the same tactic with a US rental property in order to lower our monthly expenses and increase our rental profit. There are plenty of online guides to refinancing a mortgage in the US.
Finally, if prices rose to a point where a clear profit could be made, I would sell and take the money and run. When it comes down to it, owning rental property is still work. When it is located in a foreign country, it is even more work. And I haven’t even started thinking about the potential tax implications!
I think for now, owning foreign rental property will stay on the backburner for me and Brian. It presents a lot of tempting possibilities, but it also presents a whole slew of complications that just wouldn’t work with our current obligations.