In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham delivers an unfiltered breakdown of the real pros and cons Canadian investors face when purchasing US investment properties. With more Canadians exploring cross-border real estate than ever before, Scott shares the behind-the-scenes conversations he and his team at LendCity have with investors every day — covering everything from politics and taxation to cash flow potential and landlord-friendly laws.
Scott begins by addressing the elephant in the room — the political landscape. Whether investors support or oppose the current US administration, Scott encourages them to look beyond headlines and evaluate each state on its own fundamentals: population growth, employment trends, and landlord-friendly regulations. He draws a parallel to Canada, where investors continued building portfolios regardless of who held office. The key takeaway is clear — base your decisions on market data, not political sentiment.
On the cons side, Scott discusses the potential impact of Canadian capital flowing south of the border. Billions of dollars have been leaving Canada for US investments, and while Scott believes this could push Canadian policymakers toward more investor-friendly reforms, it remains a legitimate concern. He also covers the learning curve of investing in a new country — from understanding US real estate laws and tax structures to building a reliable boots-on-the-ground team. Cross-border taxation adds another layer of complexity, including US estate tax obligations that require a qualified cross-border accountant to navigate properly. Currency conversion is another factor, though Scott notes the exchange rate often works in the investor's favour when collecting US-dollar rental income.
Flipping to the pros, Scott highlights dramatically lower US property prices, where comparable homes can cost a fraction of their Canadian equivalents. He explains how DSCR (Debt Service Coverage Ratio) loans allow Canadian investors to qualify based solely on a property's rental income — no personal income verification or US credit history required. This makes US real estate significantly more accessible for Canadians who may be maxed out on Canadian lending limits. Scott also covers the advantages of landlord-friendly states with no rent control, allowing property owners to adjust rents to keep pace with rising expenses — a stark contrast to Canadian rent control restrictions that can force landlords to subsidize tenant housing costs.
Other major benefits include unlimited property purchases with sufficient down payment, fully open 30-year fixed-rate mortgages after five years with no penalty for refinancing, and the approximately 40% currency surplus when converting US rental income back to Canadian dollars. Scott also points to the sheer scale of the US market, noting that some individual states rival Canada's entire GDP, creating vastly more investment opportunities. He references recent Canadian policy developments like Ontario's Bill 60, which introduced some landlord-friendly reforms, but argues that Canada still has significant ground to cover before matching the investor-friendly environment found in many US states.
Key Takeaways
- Evaluate US States on Fundamentals, Not Politics: Focus on population growth, employment data, and landlord-tenant laws in individual states rather than basing investment decisions on who holds federal office.
- Canadian Capital Is Flowing South: Billions of dollars in Canadian investment capital have been redirected to US markets, driven by more favourable pricing, lending options, and regulatory environments.
- Cross-Border Tax Complexity: Investing in the US as a Canadian introduces estate tax obligations and dual filing requirements — work with a cross-border accountant who understands both CRA and IRS rules.
- DSCR Loans Simplify US Financing: Canadian investors can qualify for US mortgages based entirely on a property's rental income, bypassing the need for personal income verification or a US credit score.
- Landlord-Friendly States Offer No Rent Control: Many US states allow landlords to adjust rents freely, pass rising costs to tenants, and benefit from faster eviction processes — a significant advantage over Canadian rent control restrictions.
- 30-Year Fixed-Rate Mortgages With No Caps: US investment loans are fully open after five years with no refinancing penalties, and there are no limits on the number of properties an investor can finance.
- Currency Advantage Boosts Cash Flow: Collecting rental income in US dollars and converting back to Canadian currency provides an approximate 40% surplus, amplifying already positive cash flow.
- Canada's Investor Restrictions Are Driving Demand for US Properties: Lending caps, rent control, and regulatory limitations in Canada are pushing investors to seek more growth-oriented markets south of the border.
Links to Show References
- (00:00) - Introduction — Why More Canadians Are Exploring US Real Estate
- (00:47) - Con: Navigating US Politics as a Canadian Investor
- (03:38) - Con: Capital Leaving Canada and Its Economic Impact
- (06:33) - Con: Learning a New Market and Building a US Team
- (07:31) - Con: Cross-Border Taxation and US Estate Tax
- (08:53) - Con: Currency Conversion and Down Payment Considerations
- (09:41) - Pro: Dramatically Lower US Purchase Prices
- (10:54) - Pro: Landlord-Friendly States and Tenant Laws
- (13:27) - Real-Life Example: Rent Control Challenges in Canada
- (15:15) - Pro: Unlimited Properties and 30-Year Fixed-Rate Mortgages
- (16:11) - Pro: Earning US Dollar Rental Income
- (16:46) - Pro: The Scale of the US Market vs. Canada
- (18:14) - Pro: US Entity Structures and Investor Protections
- (19:07) - Canada's Declining Competitiveness for Real Estate Investors
- (21:27) - Final Thoughts and Key Takeaways
