Canadian Investing in Arizona Real Estate? Get a Property Manager

avatarthumbnail.jpgOddly enough, I was having this conversation with a client from Edmonton yesterday … is it necessary for a Canadian purchasing rental property here in Arizona to hire a property manager?

Logistics told me you’d want to have a property manager, unless you enjoy flying up and back to the States repeatedly. Then I saw this note from Larry Yatkowsky, from a Q-and-A forum in the local paper in Vancouver:

QUESTION: We just purchased property in xxxx (a 4-plex apartment). We plan on renting out 3 of the units and keeping one. The border-crossing inspector told me that I have to hire a rental agency in order to rent out the apartments, and I also have to have a property manager full time. Do you know if this true? We will be at our apartment approx 2 times a month. So we do not need a property manager.

DAVID INGRAM replies: You need a property manager if you do not want the strong possibility of going to jail for a few days before being deported and then not allowed back in the USA.

Crossing the border when you have an ad running to show the premises and saying you are going down to spend the weekend in your holiday home (i.e. lying to the HOMELAND (sic) Security official could result in seizure of your vehicle and a ban for up to 10 years under their ER (Expedited Removal) provess. In other words, is is more serious to lie to the guard at the border than it is to do the work.

You ‘could’ actually show the property for rent, but you can NOT write out a contract for rent or collect a single rent cheque or cash for rent in the United States. There is nothing new about this. …

If you are physically there you can NOT cut the grass, shovel the sidewal, paint or decorate or repair of fix or remodel or improve or take out the garbage for any part of the rental property. You can paint and clean your own unit if it is NEVER rented or intended to be rented. You cannot paint and clean up getting the property ready for rent.

Luckily, shoveling sidewalks is not a major issue here in Arizona. But the rest deals with two separate issues. One – don’t lie to the border agent. Seems to make sense. Two – get a property manager to handle the work on the property since anything you do can and will be considered working here in the states without papers.

[tags]Phoenix real estate, Canadian investors Arizona real estate[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

5 Comments

  • Eric Murrietta 9 years ago

    Jonathan,

    Crazy that they would think travelling back and forth to manage the property might make more sense. I like the insight into the thoughts of the Canadian buyers.

  • Sheila 9 years ago

    My interpretation of this is that as Canadians you are not allowed to work in the states without the appropriate permits. Some of this would equate to what I would call “sweat equity” where the work they would perform would help to improve their income situation regardless of whether they are paid for the work or not.

    Interesting article.

  • Jonathan Dalton 9 years ago

    I’m not so sure, Sheila … it looks as if you can do the work on your own personal property as long as you’re not going to rent it out.

    But if you’re renting it out, that’s a business and the work you are doing is business related. Running it through a property management company in the states makes it legal.

  • Eric Myers 7 years ago

    Thanks for the tips. I have some friends moving here to Arizona from Canada soon and Im trying to provide them with as much assistance as possible. I think a property manager may be just the thing we need. Thanks.

  • Nir 6 years ago

    Can you please specify or send me the link that will outline what I can and can’t do as a foreign investor in the US with regards to property management.
    I know that I can show the unit and I can have the tenant depositing his rent in my account but I can’t fix the unit or collect rent and sign the contract.

    Thanks,

    Nir

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