Kye Grace

If only it was this easy. My toungue is planted firmly in cheek in this vlog. It is interesting though, observing all the different avenues that revenue is generated from the sale of real estate not directly attached to the actual property. I do enjoy catching these show when I have a chance and only wish it could be this easy. Of course, is anything easy worth doing?

If you haven't gone through the financing process your Realtor may be able to refer you to some great mortgage professionals. Sure they may receive a referral fee for this, in my case I get points to put towards merchandise from one and nothing at all from another. This by no means influences my decision to recommend this person anymore than collecting grocery store points influence my eating choices. The points rewards do not compare to the reward of extremely satisfied clients.

First I will start off by saying I am not a Realtor who is defensive about house prices reducing.

That would be like being offended by the sun rising each day. History has shown that the sun comes up, the sun goes down. House prices go up, house prices go down. The difference is one is fairly predictable. To not accept the rise and fall of real estate prices would be unproductive if not irrational.

Am I the only one who finds articles discussing the Canadian housing market seeing price reductions somewhat useless to home buyers? Am I buying or selling houses in Canada? Well yes...well sort of...well no. I was thinking about narrowing it down to a province or even maybe a city. Heck I may even be so brazen as to narrow it down to a particular neighbourhood.

Now I realize that the media can’t or won’t report on market activity in each neighbourhood in Canada. However, what does a reader gain from knowing the prices are down such and such percent across Canada? Can they take that tidbit of information into negotiations with them?

Point being, real estate is local. Neighbouring towns can have polar opposite trends depending on job creation, in migration, supply, quality of schools, hospitals and transportation. Different parts of a city will experience the same effect.

Here is a real life example, a mill burns down in Prince George and house prices falter as there is job losses; the Hebron oil deal is approved in Newfoundland which includes partial manufacturing of the rig in province and house prices start rising. They are 7335 kilometres apart by car; both are used to calculate the average national housing price and subsequent increases or decreases.

There is nothing wrong with trying to be in tune with what the real estate market is doing, just make sure it is the market that is actually relevant to you.

By the way, these articles and this data do have a practical application for those observing the national economy for purposes other than the purchase or sale of real estate. Real estate tends to be an indicator of the overall health of our economy, however it is not a driving force of the economy.

As the real estate market begins showing signs of a potential downturn the number of listings has sky rocketed. A lot of these listings are from people who bought their properties over the past three years. They bought when it was obvious the market was on its way up. Does this make them brilliant real estate investors? Not in my books. It makes them a real estate speculator.

Although it appears anyone could have got it right in the past few years we are seeing that actually getting it right when it comes to real estate investing takes far more than taking up a seat on the band wagon. You could have bought just about anything and looked like a genius, careful you don’t believe your own success. If you are now trying to unload those properties for whatever profit they may have earned you, you are not an investor. If you fear the properties not being worth next month what they were worried about last month, you are not an investor. If you bought your property with the intent of selling it at the soonest market peak, you are not an investor. You are a speculator.

An investor does significant research into the cities or towns looking for job creation, average incomes increasing, taxes going down, transportation improvements all economic fundamentals that drive a real estate market. Secondly an investor finds a property that is cash flow positive. A property that earns an income that pays the mortgage, taxes, maintenance, property management costs and provides a small amount of additional revenue directly to you.

The real difference...speculators buy on the way up (buy high, sell higher) and try to get out before it goes down and hope to make a profit so they can then beat their chest and say look how much money I made. Investors buy when it makes sense regardless of the market; they know how to choose a property to buy, hold and exit while enjoying the cash flow which benefits from inflation. Most importantly they know how to make enormous amounts of money by investing in real estate.

There are numerous readings and organizations out there that will guide you in becoming a real estate investor. Here is one that I believe is worth exploring https://www.reincanada.com.

I have allowed some of my thoughts trickle out...if you ever want to hear more drop me a note, give me a call or meet me face to face for a chat and beverage. Better yet let me hear yours, I love dialogue with anyone.