As we head into 2025, more Canadian investors are looking south of the border for lucrative real estate opportunities in the United States. With diverse markets, varying rental options, and favorable tax laws, the United States presents a compelling case for Canadian investors seeking to expand their property portfolios. But which U.S. states offer the best prospects for Canadian real estate investors? We’ll explore the top five locations based on real estate investment opportunities, cost of real estate, upside potential, cap rates, market forecasts, and overall tax burdens. We’ll also delve into the differences between long-term vs short-term rentals in each location and provide recent examples of Canadians buying properties in these markets.
1. Phoenix Arizona: A Hot Market for Residential Investment
Phoenix has been one of the fastest-growing cities in the U.S., and its real estate market continues to attract international investors, particularly from Canada. The state’s affordable property prices, warm climate, and expanding economy make Phoenix an ideal destination for Canadians seeking strong rental income and capital appreciation.
Real Estate Opportunities
- Residential Market: Phoenix’s residential real estate market offers a wide variety of investment opportunities, including single-family homes, townhomes, and condos.
- Commercial Opportunities: As the population grows, so does the demand for commercial real estate, providing another avenue for investors to explore.
Cost of Real Estate
In 2024, the median home price in Phoenix is around $420,000. While prices have risen significantly in recent years, Phoenix remains more affordable than other major U.S. cities like Chicago, Los Angeles, or New York.
Cap Rates and Market Forecast
Cap rates in Phoenix typically range from 5% to 6%, making it an attractive market for rental investors. The market is expected to continue growing, driven by population influx and job creation, which keeps demand high.
Tax Considerations
Arizona has a relatively low overall tax burden. It has a flat state income tax of only 2.5% and Property taxes in Phoenix are around 0.60% of assessed property value, which makes it favorable for Canadian investors. However, foreign investors must be mindful of FIRPTA (Foreign Investment in Real Property Tax Act), which imposes tax withholding on the sale of U.S. property by foreign owners.
For more insights into U.S. tax regulations for Canadian investors, visit US Real Estate Investing for Canadians.
Long-Term vs Short-Term Rentals
- Long-Term Rentals: Phoenix is a fantastic market for long-term rentals due to consistent demand from families and professionals relocating to the area.
- Short-Term Rentals: The growing tourism sector also makes Phoenix ideal for short-term rentals. Investors can capitalize on the influx of tourists visiting for events like spring training and year-round golfing.
Our Client: Canadian Investor Buys a Vacation Home in Scottsdale, Arizona
One Canadian couple purchased a two-bedroom condo in Scottsdale, a Phoenix suburb, for $350,000 in 2023. They now rent the property as a short-term vacation rental, earning a net income of $25,000 annually while enjoying personal use during the winter months.
For more on Canadian real estate investment opportunities in Arizona., visit Canadians Buying Arizona Real Estate.
2. Orlando Florida: The Vacation Rental Capital
Orlando is a premier destination for Canadians investing in vacation rental properties, thanks to its booming tourism industry. The city is home to world-renowned attractions like Disney World and Universal Studios, drawing millions of visitors each year.
Real Estate Opportunities
- Vacation Rentals: Orlando’s short-term rental market is highly profitable due to the high tourist volume.
- Single-Family Homes: These are often rented to tourists or long-term renters, making them a versatile investment option.
Cost of Real Estate
In 2024, the median home price in Orlando is approximately $400,000, making it more affordable than other major Florida markets like Miami.
Cap Rates and Market Forecast
Cap rates for short-term rentals in Orlando can range from 7% to 9%, higher than many other U.S. markets due to the strong demand for vacation properties. The market is expected to continue growing in tandem with the city’s tourism sector.
Tax Considerations
Florida is one of the few U.S. states with no state income tax, which is a significant advantage for Canadian investors. Property taxes in Orlando range from 0.83% to 1.1%, depending on the county. This makes Orlando a tax-efficient market for rental income.
For more on U.S. real estate investment opportunities, visit US Real Estate Investment Opportunities for Foreign Buyers in 2024.
Long-Term vs Short-Term Rentals
- Long-Term Rentals: Long-term rentals in Orlando tend to be less profitable than short-term rentals, given the city’s focus on tourism.
- Short-Term Rentals: Vacation rentals are incredibly lucrative in Orlando, with high occupancy rates throughout the year. Proximity to theme parks and other attractions ensures a steady stream of visitors.
Our Client: Canadian Investor Purchases Short-Term Rental Near Disney World
A Canadian family purchased a four-bedroom home near Disney World for $500,000. They rent it out on platforms like Airbnb, with an average monthly income of $6,000 during peak seasons, easily covering their mortgage and generating significant profit.
For a comprehensive guide on short-term rental investments, visit The Ultimate Guide for Canadians Buying a Short-Term Rental in the U.S..
3. Austin Texas: A Tech Hub with Explosive Growth Potential
Austin has earned a reputation as one of the fastest-growing cities in the U.S., with a booming tech industry attracting a young and dynamic workforce. This makes Austin an appealing market for both residential and commercial real estate investors from Canada.
Real Estate Opportunities
- Single-Family Homes: Austin’s residential market remains strong, with high demand from families and tech professionals.
- Multi-Family Units: Investors seeking rental income can explore multi-family units, which benefit from Austin’s population growth.
Cost of Real Estate
Austin’s real estate prices have surged in recent years. As of fall 2024, the median home price is $550,000, reflecting the city’s rapid growth. While prices are higher than other cities on this list, the potential for appreciation is substantial.
Cap Rates and Market Forecast
Cap rates in Austin generally range from 4% to 5%, slightly lower due to the city’s higher property prices. However, the market forecast is highly positive, with property values expected to continue rising as the tech industry drives demand.
Tax Considerations
Texas is known for having no state income tax, which is a significant draw for Canadian investors. However, property taxes in Austin are relatively high, ranging from 1.8% to 2.2% of the property value, making it important for investors to consider their total tax burden.
For more details on U.S. real estate investment and tax considerations, visit US Real Estate Investing for Canadians.
Long-Term vs Short-Term Rentals
- Long-Term Rentals: Austin is an excellent market for long-term rentals, with high demand from tech workers, students, and families.
- Short-Term Rentals: Short-term rentals can be profitable, especially for properties located near Austin’s bustling downtown area. However, investors should be aware of local regulations that may restrict short-term rentals.
Our Client: Canadian Tech Investor Buys Multi-Family Property in Austin
A Canadian tech entrepreneur purchased a duplex in Austin for $750,000 in 2024. With strong demand from renters, the property generates $4,500 per month in rental income, yielding a healthy ROI.
4. Las Vegas Nevada: A Market for High Returns on Short-Term Rentals
Las Vegas has long been known for its entertainment and hospitality industries, and these sectors fuel a robust short-term rental market. Canadians looking for a vacation rental with strong upside potential should consider Las Vegas.
Real Estate Opportunities
- Vacation Homes: The demand for vacation rentals in Las Vegas is fueled by year-round tourism, making it ideal for short-term rental investors.
- Condos: High-rise condos on or near the Strip offer appealing rental options for investors.
Cost of Real Estate
The median home price in Las Vegas is $420,000 in 2024, making it relatively affordable compared to other major U.S. cities. Condos near the Strip can range from $350,000 to $600,000, depending on location and amenities.
Cap Rates and Market Forecast
Las Vegas offers some of the highest cap rates for short-term rentals, often exceeding 8%, due to the city’s thriving tourism industry. The market is expected to remain strong, with continued investment in the city’s infrastructure and entertainment sectors.
Tax Considerations
Nevada is another state with no state income tax, making it a tax-friendly destination for Canadian investors. Property taxes in Las Vegas are moderate, averaging around 0.70% to 0.75%.
Long-Term vs Short-Term Rentals
- Long-Term Rentals: While long-term rentals are viable in Las Vegas, short-term rentals tend to offer much higher returns.
- Short-Term Rentals: Properties close to the Strip are in high demand for short-term rentals, with high occupancy rates and strong nightly rates, especially during peak tourist seasons.
Our Client: Canadian Investor Purchases High-Rise Condo on the Las Vegas Strip
A Canadian investor purchased a luxury high-rise condo near the Las Vegas Strip for $600,000. The property is rented out as a short-term vacation rental, with an average occupancy rate of 80% and monthly earnings of $6,500.
5. Miami Florida: A Luxury Market with Global Appeal
Miami has long been a hotspot for international investors, and Canadian buyers are no exception. The city offers a mix of high-end condos, beachfront properties, and suburban homes, making it a versatile market for real estate investment.
Real Estate Opportunities
- Luxury Condos: Miami’s luxury condo market continues to thrive, attracting buyers from around the world.
- Beachfront Properties: Investors looking for high-end vacation homes can explore Miami’s waterfront properties.
- Commercial Real Estate: Miami’s growing commercial real estate market offers opportunities for investors interested in office spaces or retail properties.
Cost of Real Estate
The median home price in Miami is $500,000 in 2024, with prices higher in luxury areas such as Brickell and South Beach.
Cap Rates and Market Forecast
Cap rates in Miami vary widely, with long-term rentals typically offering 3% to 4% returns, while short-term vacation rentals near the beach or downtown areas can yield cap rates of 6% to 7%. The market is expected to remain stable, with continued demand from both domestic and international buyers.
Tax Considerations
Like Orlando, Miami benefits from Florida’s no state income tax, making it an attractive option for Canadian investors. Property taxes in Miami range from 1.1% to 1.3%, depending on the county and property value.
For more details on Florida’s tax considerations and market opportunities, visit Canadians Buying U.S. Real Estate.
Long-Term vs Short-Term Rentals
- Long-Term Rentals: Miami’s long-term rental market is supported by a steady influx of new residents, particularly from Latin America and Europe.
- Short-Term Rentals: Miami is a prime location for short-term rentals, especially in tourist-heavy areas like South Beach. However, investors should be aware of local regulations, as some areas have restrictions on short-term rental activity.
Our Client: Canadian Buyer Purchases a Luxury Condo in South Beach
A Canadian investor purchased a two-bedroom luxury condo in South Beach for $800,000. The property is rented out as a short-term vacation rental, generating $7,000 per month in rental income during peak tourist seasons.
Conclusion: Best U.S. Locations for Canadian Real Estate Investors in 2025
In 2025, Canadian investors have an array of attractive U.S. markets to consider. Whether you’re looking for vacation rentals in Orlando and Las Vegas, long-term rental opportunities in Austin and Phoenix, or luxury investments in Miami, the U.S. offers diverse real estate opportunities that cater to various investment goals. Understanding the market dynamics, tax implications, and rental prospects in each location is crucial for making informed investment decisions.
For more insights on U.S. real estate investment, explore all our Canadian investor resources at Canada to USA or visit our Cross Border Realty Team.
