In recent years, Canadians have been some of the biggest buyers of property south of the border, purchasing nearly $9.5 billion worth of U.S. real estate in the last year alone, according to a recent report by the National Association of Realtors. As we head into the start of a particularly unusual snowbird season under COVID-19 however, a significant number of Canadians are now in a “wait and see” situation as to whether they will want to or be able to travel south to enjoy their U.S. property under the sun this winter.

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Understandably, with the Canadian/U.S. border closed and this uncertainty still on the horizon, the prospect of only seeing the costs related to their property without the benefits of enjoying it has made many Canadians rethink how they want to use their U.S. vacation property. Is this a good time to sell the property? Or perhaps rent it? Are there other options for putting that property to work?

For Canadians facing these circumstances, here are a few considerations as to what option might work best for you:

Selling your U.S. property

It might be tempting to sell your U.S. property – after all, you’re not using it at the moment and you may be able to move the proceeds back to Canada with the exchange rate in your favour. However, will you regret it next winter if you no longer own it? Aside from the lifestyle considerations, think about the cost of selling it as well. In addition to what you might need to spend to get it market-ready, you’ll contend with:

  • Closing costs and other related expenses
  • Potential capital gains taxes on the profit
  • Seller’s agent fees, which can be five to six per cent of the sale price

Renting your U.S. property

Renting out your vacation home while you’re not using it could help offset the costs of owning it. By renting out your home on a short- or long-term basis, you may be able to:

  • Pay down your U.S. mortgage faster
  • Cover taxes, insurance, fees and more
  • Enjoy an income stream in U.S. dollars – a particularly nice benefit while the U.S. dollar is so strong against the loonie so you can limit the amount of Canadian dollars you need to convert to pay U.S. expenses

The challenge of renting your property, especially if you can’t be there to manage it yourself, is finding the right property management support while ensuring the financial benefits aren’t offset by the expenses. Additionally, you may have certain tax consequences of earning rental income, which should be discussed with a cross-border tax expert.

Tapping your U.S. home equity

With the pandemic and underlying health and border uncertainty, 2020 and 2021 may actually be the perfect storm for Canadians owning U.S. real estate to consider unlocking their equity as a cost-effective cross border financial strategy. With the increase in home values over the last several years, the weakness of the Canadian dollar and the current low interest rates in the U.S., it is a timely option.

You’re no doubt familiar with the sting of foreign exchange as the Canadian dollar remains significantly below parity compared to USD – currently it’s around 75 cents to the U.S. dollar. If your U.S. home has increased in value – or if you bought it with cash, you may now be able to borrow up to 80 per cent of your home’s value to take advantage of your home’s appreciation and the strong U.S. dollar.

You may be able to pay off your current mortgage with a new loan – or get a home equity line of credit (HELOC) – and take cash out of your U.S. home to make improvements, pay off debt in Canada or cover U.S. expenses without concern for foreign exchange rates.

In addition to the currency exchange considerations, consider the cost of borrowing. Mortgage rates in the U.S. are currently at a historic low, making a home refinance or HELOC relatively low cost. And because most U.S. mortgages don’t have prepayment penalties, you can pay down or pay off your home loan at any time – an especially attractive option when the currency exchange rates are more favourable.

To make the process even easier, look for banks that can use your Canadian credit history to qualify you for a mortgage or HELOC or for programs, such as RBC’s U.S. HomePlus Advantage, which offer full-service homeownership support from advice, tools, perks and access to experts to guide you through refinancing a U.S. home.

Though the COVID-19 pandemic may be interrupting your travel plans this year, it ultimately doesn’t have to disrupt your finances. By considering the different financial options available and choosing the one that works best for you and your specific circumstances, you can help set yourself up for the (hopefully) sunnier days ahead.


  1. I just sold my US property in October. As a little “add on” the title company MUST take 15 % of your proceeds right away to submit to the IRS (Most States work with title companies, just a few States use lawyers to close) Closing costs are quite high and for me it was about $ 10,000 on top of the commission. Commission rates (at least in Florida) are at least 6 % , many charge even 7 % (we should be so lucky). Also, as to renting your property, you will have to file a US tax return with the IRS every year. I’ve done this since 1999 and I am glad it’s all over….lol

    • Sabine, businesses are meant to show a profit if only a little bit, otherwise they can’t stay in business. I networked extensively for more than thirty years including stateside transactions, and can verify what you state about commissions charged in various states. It was clearly reflected in my incoming referral fees cheques.

      But here at home I charged six and seven points throughout the years. The six point minimum was a Board requirement in order to process a listing on MLS.

      Until the mid 90s fee construction was dictated by BOR’s, although corporations could have their own rules but such rules had to be applied throughout the corporate empire; and then as if by magic buyer brokerage appeared in the mid 90’s, and one percent fees popped up that had been forbidden on MLS suddenly had to be permitted. How many newbies know that history.

      On each buyer broker contract I included and had it initialled that the buyer would either pay my commission independently or top up any co-op commission offered on MLS that was less than three points, and instructions that my fee, sometimes four points as co-op, depending on the buyer demands availability, and my fees would be paid through their closing law office that received the appropriate invoice and a copy of the buyer contract. Needless to say many law offices had to be educated. Several called to say didn’t I know that the sellers paid the commission. The law offices hadn’t yet heard of the then new buyer broker contracts.

      These buyer contracts were signed by all buyers including sellers who became buyers. I only one time ever had a buyer debate signing the buyer contract regardless of the commission fee; he simply didn’t want a contract obligating him to have only one agent represent him (and I would not represent him without one); he had talked to several other agents who kept telling him not to sign a contract under any circumstances because they themselves let him run them ragged without a contract to prove their point. But after a whole year no one had been able to fill his wish list.

      As was my initial usual method I allowed him to see three properties he had chosen, with no buyer contract representation (and I was very careful what I did and didn’t say), so he could see for himself how I worked differently than other agents, then I flat out declined to represent him.

      He was very surprised, because I was always very polite but firm; my rules applied to everyone. A couple of weeks later, finally realizing what he wanted didn’t in fact exist in his price range, after continuing to run other agents ragged wasting their time, he agreed to sign my contract and to top up any co-op fee.

      I only had to show him one property after the initial three he had chosen (that really didn’t match his wish list except by location). The property that I felt completely matched his demands and even the price was right: I had driven particularl streets where I knew what he really wanted was in fact located.

      An agent was just installing the for sale sign. Seller was a corporate Relo and it was reflected to sell fast, in the asking price.

      BINGO! Did I get lucky or what? Due to under-market pricing back in the 90s in an ordinary market I found myself in a multiple offer situation. But my buyer followed my advice and he got his dream home. And he topped up my co-op. He paid me an additional $2300. above the co-op.

      Here is what he wrote, a long thank you including in part:
      “We are thrilled with our purchase . . . and are certainly in your debt. We basically made a windfall of 10’S of thousands of $ in one night due to your efforts. You told me that you earn your fees and you were not kidding . . . I sensed that you were for real.”

      Here is a link explaining: The REALTOR AND YOU – A Realtor’s Costs : Your Costs (there’s even an American link at the top of my old article). I had dozens of requests over the years asking to reprint this article.

      Carolyne L 🍁

    • “Sell Your Way Through Life” Audiobook By Napoleon Hill – YouTube

      Readers might have to reload at hour 6, as often happens with long YouTubes. Just scroll the bar on the reload to where it stopped.

      However maybe start the book initially at Chapter 36 by scrolling the bar to hour 9 where it explains how one charges (is paid) what one is worth.

      I read the paperback version many decades ago. It’s truly a much needed and appropriate read/listen while enduring the current pandemic, or even during the holidays, maybe making it an annual reminder-read by putting the free-read link on your repeat calendar entry on your smartphone.

      Brokers would find it a valuable link gift to their agents. Agents might find the link a useful gift to share in their newsletters, suggesting the receiver pass it on.

      A read that could change many lives in the real estate industry.

      Carolyne L 🍁



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