In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham dives into the shifting investment landscape for Canadians, highlighting why many are turning to US real estate amid economic challenges at home. Drawing from charts shared on social media and Statistics Canada data, Scott explains how foreign direct investment has been flowing out of Canada since around 2015, with a significant uptick in outflows to the US by the end of 2023. He attributes this to factors like the recent capital gains tax inclusion rate increase effective June 25, 2024, which taxes two-thirds of gains over $250,000 for individuals and all gains for corporations, prompting investors to seek more favorable environments. Scott shares personal anecdotes, including his own experiences with tenant issues and rising mortgage rates, to illustrate how Canadian policies like rent controls and lengthy Landlord and Tenant Board backlogs—currently averaging 6-8 months—are deterring domestic investment.
Transitioning to US opportunities, Scott contrasts Canada's restrictive lending and foreign buyer bans (extended until December 31, 2026) with the investor-friendly US market. He emphasizes easier eviction processes (typically 2-4 weeks), flexible rent adjustments, and lower property costs, where solid homes can start around $110,000 for mortgaged purchases. A key focus is on Debt Service Coverage Ratio (DSCR) loans, which qualify based on property cash flow rather than personal income, allowing up to 75% loan-to-value with rates as low as 6% in late 2025. Scott recommends markets like Ohio for cash flow (e.g., Cleveland and Columbus), Florida for Airbnb potential, and Texas for executive rentals via platforms like PadSplit. He also touches on using RRSPs for down payments through services like Seaport Credit and setting up US banking with institutions like Comerica Bank.
As of November 2025, US real estate markets show resilience with median home prices around $428,700 nationally, up 4% year-over-year, driven by job growth in states like Texas. Scott urges diversification to mitigate risks from Canada's economic pressures, including population growth strains and policy hurdles. This episode provides actionable insights for Canadian investors eyeing US properties, blending data-driven analysis with practical tips for getting started, from entity setup to negotiating seller credits for better rates.
Key Takeaways
- Investment Outflows from Canada: Since 2015, capital has increasingly left Canada for the US, accelerated by the 2024 capital gains tax hike taxing two-thirds of gains over $250,000 for individuals and all for corporations, per CRA guidelines.
- Landlord Challenges in Canada: Rent controls limit increases (e.g., from $1,400 to $1,460 over years despite market rents at $3,000), while 6-8 month Landlord and Tenant Board delays hinder evictions or sales, unlike swift 2-4 week processes in the US.
- US Lending Advantages: DSCR loans focus on property cash flow (minimum 1.0 ratio) over personal income, with 25-30% down payments, rates from 6-8.5%, and no need for US credit or jobs—reserves of 3-12 months often required.
- Market Recommendations: Target Ohio (Cleveland/Columbus) for low-cost cash flow properties; Florida for lifestyle/Airbnb rentals; Texas for mid-term executive leases via PadSplit, amid strong job growth and population influx.
- Practical Setup Tips: Use Comerica Bank for free US accounts without a US address; leverage RRSPs via Seaport Credit (net worth-dependent); request up to 5% seller credits to buy down rates, saving more than price reductions.
- Diversification Benefits: US markets offer lower entry costs (e.g., $110,000+ for mortgaged homes), Section 8 government-backed rents, and growth potential, with national median prices at $428,700 in Q3 2025, up 4% YoY.
Links to Show References
- (00:05) - Introduction to Investment Trends
- (03:25) - Shifting Investment to the U.S.
- (04:59) - Challenges in Canadian Real Estate
- (08:14) - Personal Landlord Challenges
- (09:14) - Reasons to Invest in U.S. Properties
- (10:12) - Understanding U.S. Lending Practices
- (15:49) - Insights from Canadian Economists
- (18:10) - Interactive Q&A Session
- (21:34) - Recommended U.S. Markets for Investment
- (27:59) - Final Thoughts and Next Steps
- (35:33) - Conclusion and Farewell
