Purchasing Real Estate in US

[JLau]

How many of you had experience in purchasing real estate in US? I am looking to possibly get a place in Hawaii, what are some things i should caution about, and any particular area in Oahu you would recommend?

Kailua and Hawaii Kai are the places i have been looking at for affordability and somewhere closer to Honolulu. If anything, it will just be a vacation home for now, price range up to 400k?

I have done some research and most people recommend to do cash purchase, because if you want a mortgage in Hawaii, it must be with a Hawaiian bank, and interest rates can be higher, because non-resident + not primary resident.

[whodiman]

I don't know about Hawaii but I have purchased in other states. Things to be aware of is that you will need to file an annual tax return. You can buy the online software but keep in mind some of the rules are slightly different. You MUST take depreciation and if you don't, they will have deemed that you did. This could lead to a big tax bill when you sell. Of course, if to do this you will need to have an ITIN number which is like a SSN but for non-residents.

There were a couple of banks providing mortgages to Canadians just over a year ago for Hawaii but not sure if they still do or not. The advantage is that you can lock in your rate for 30yrs even if it is a bit higher.

[xrayvsn]

My undestanding is that You only need to file an annual tax return if your property produces income. If you aren't renting it out, then you don't need to file until you sell the property.

[JLau]

most likely it wont be rented out...maybe just to friends going to hawaii for vacation

I heard the rates are quite high for Canadians, if thats the case, we might just pay cash for it or get a HELOC here....

[projekz]

I'd be buying in Maui or Kauai. Oahu has got a much higher crime rate so be prepared to pay a lot for insurance. I have a friend that ended up buying a condo in Maui because the insurance was almost double in Oahu. Not sure which area tho.

[whodiman]

Originally posted by xrayvsn
My undestanding is that You only need to file an annual tax return if your property produces income. If you aren't renting it out, then you don't need to file until you sell the property.

You are correct. I didn't read carefully enough again.

Rates are higher for Canadians but you can lock in for 30 years. It's also easier to get a US mortgage as a vacation home. So while rates are lower on your heloc, your heloc is a floating rate so it could surpass the rate of your US mortgage ..at least in theory it could.

[Frankie88]

I have some clients bought properties in US but most of them took equities out from their canada properties. Since rates are higher and more importantly you need a huge (35%-50%) down payment where locks in a big chunk of cash that can be used for other investment.

[whodiman]

Might want to check with RBC Bank (Georgia). If you are not buying for investing they used to offer 25% down and a fairly good rate (5.25%) locked in for the full 30 yrs at that rate and no payout penalty. Not sure if that is still the case or not.

[JLau]

I am not a huge fan of Maui, only 1 main road to get through the island, Oahu has a bit of everything...

If anything, cash is the way to go i think....

[Feruk]

I figured I'd resurrect an old thread on a similar topic. I'm considering buying a property down in Arizona with a business partner. What's the general procedure? Should we start by talking to a realtor down there, or do we need to set up an LLC first and open a US bank account before doing anything else?