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November 6, 2007

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The Canadian Gold Rush

The gold coming out of the 2010 Vancouver Winter Olympics won’t just be in the form of medals. Around $8 billion will be spent on the games, and the door is open to companies looking for their own piece of gold.

Related Links

Find business opportunities related to the 2010 Olympics at the 2010 Commerce Center.

Visit B.C.'s 2010 Olympics Gateway to Opportunity

A look at the economic impact of the 2010 games

A look at the the wealth generated by Alberta's Oil-Sands

Official web site of the Province of British Columbia - BC Games Secretariat

Official web site of the Vancouver 2010 Olympic and Paralympic Winter Game

More about the 2010 Winter Olympics

More about the Paralympic Winter Games

 

CEO Spotlight

Canadian Consul General Peter Lloyd discusses economic opportunities and trade between Washington state and its neighbor to the north.

Smart Money

We sat down with financial advisor Kathleen Miller to get advice about investing in vacation properties.

Buying Property in British Columbia

Have you seen an increase among your clients who own or are thinking of buying property in Whistler and B.C. in advance of the Olympics?

Yes. It became a very popular place to purchase property when the Canadian dollar was low against the U.S. dollar because there was great value there and few restrictions on Americans owning property in Canada.

As the exchange rate has changed, the location has remained popular because of the upcoming Winter Olympics and also the beauty of the region, particularly the increased interest and building in Whistler.

What approach should someone take if they are thinking of buying property in B.C?

There are multiple ways people structure their investment and purchase of a home:

  • Timeshare condos
  • Outright ownership of a home
  • Purchase of a home to use as a rental business
  • Speculative investors, who hope their property values will increase as the Olympics approach and plan to sell right before or soon after
Client examples
  • One client owns a very high-end home that he rents out to cover his expenses.
  • Another client is part of a four-way partnership with some other couples who have pooled their money and share expenses. Each uses it at different times of the year. Sometime they all go up and vacation together.
  • Still another client purchased a bed-and-breakfast that is being developed on the road to Whistler. She expects it will be a popular place during the Olympics. She also thinks the Olympics will be an excellent opportunity to market it to people who will want to come back after the Olympics. She plans to run it as a business for several years after.

Are there risks or challenges that U.S. citizens should be aware of when purchasing a home in B.C.?

Some considerations include:

  • Currency crisis. The exchange rate is not what it once was. The value of Canadian dollars has increased significantly (approximately 60 percent) versus the U.S. dollar over the last five years, so the values that were there because of the exchange rate are no longer available.
  • If you choose to rent your property, you will most likely be paid in Canadian dollars. You need to adjust the amounts you charge for the exchange rate so you don’t lose money when you convert it back to U.S. dollars [depending on the exchange rate].
    Example: I recommend to several clients that they open a bank account in Canada to deposit their rental income and make withdrawals for expenses so they do not have to time the exchange rate to get their money out of Canada.
  • Consider the financial implication of taxes when you sell. You could be double-taxed on your profit—both the Canadian and U.S. Governments will get their cut.

What about renting your property? How can a homeowner make sure they are getting the best rental price for their home?

Look at the total return on investment. The rental price depends on what the market will offer. But there are expenses to consider:

  • Homeowners dues
  • Taxes
  • Property management and marketing fees (could be up to 10 percent)
  • Inflation

For more information:

Bankrate.com article on the logistics of buying a second home.

Online rate calculation to determine if you qualify for a second mortgage.

Forbes' advice on how to buy the perfect vacation home.

Real Estate opportunities in Vancouver and British Columbia

Scambuster

Martin Cordell of the Department of Financial Institutions warns investors about the top ten investment scams.

Bulls and Bears

bill Smead Portfolio Manager Bill Smead begins a series on Northwest stocks with a look at Microsoft and Washington Mutual.