(♪♪♪) Welcome to Renting your U.S. Property for Canadians Who wouldn’t love an extra income stream in U.S. dollars? If you’re a Canadian with a vacation property in a sunny spot like Arizona Florida, Hawaii or California renting your place out while you’re not there can really help balance the expenses of having a second home. First, consider what you stand to gain by renting out your vacation home and the potential downsides. On the pro side— The rental payments you receive in U.S. dollars will provide cash flow in the U.S. without foreign exchange fluctuations. There may be some cons, however. Your rental income will be taxable, but you may be able to write off some of your expenses. You’ll need a U.S. individual tax identification number or social security number to do this and it’s a good idea to get advice from a cross-border tax expert. Finding good renters can be time-consuming, and you only make money when you’ve found them. Also, renter damage, if not maintained and repaired, could reduce your home’s value. Once you’ve decided to rent your property, the next step is to determine when, and for how long, you want to do it. As an example, if you spend most of the winter in your U.S. home— you may choose to rent your place only to short term tenants. Before doing anything, check local bylaws or city municipality laws to find out if renting your place is allowed in your area. Also, check for any applicable condominium or homeowner association rules that might prohibit short-term renting. You can typically charge more for short-term stays than you can for renting your place to one renter for a few months. Get a benchmark on what you can charge locally by talking with your neighbours and looking at comparable listings online. In many markets, prices vary based on the time of year, and when the area is in high demand. When you’re setting your rental price, keep in mind that you’ll be covering costs such as utilities, cleaners, and — likely — a property manager to look after things while you’re away. Don’t forget to take taxes into account when you determine your price. If you purchased your U.S. home as an investment property, long-term rentals may be a great option to offset mortgage costs. Make sure you have proper insurance coverage — especially liability insurance for the time you plan to rent out your property. Check with your insurance company to find out what’s covered and what additional coverage you might need. If you’re planning to rent your house year-round, it’s likely in your best interest to hire a property manager to help with screening your tenants, as well as the ongoing issues involved with being a landlord. The next step is to determine how to rent your property. One idea is to promote it online – you can even set up your own website showcasing your property. Tell friends, neighbours, and family that you’re looking to rent out your property to garner word of mouth. Using your own network can be a great way to find renters you trust. Or, you can hire a rental company or local real estate agent who’ll do all the work for you from advertising to property management. Remember, whatever you decide to do, learn from each experience so you can reach maximum occupancy with minimum effort. At the end of the day, there are different ways to leverage your U.S. property to offset costs or increase your bottom line. Today you learned how renting generates revenue, but there are pros and cons to consider and research and knowledge to gain before you start. You discovered how you can avoid losing on foreign exchange with payments in US dollars. Plus how to leverage long or short-term rentals to fit your unique needs. And how to promote your property to minimize the time it is left vacant. But most importantly, you learned how renting U.S. property as a Canadian living in Canada can be a really smart idea! Let RBC Bank guide you on your journey south, and you’ll find renting out your US dream home is easier than you think! (♪♪♪)