IS A REVENUE PROPERTY A GOOD INVESTMENT?
Anyone that says Real-Estate, in Greater Vancouver is not a good investment is a fool! I have actually heard a few people who are negative on Vancouver area Real-Estate. Some even predicting dire consequences, for those who invest in it, referring to a decades ago market crash. These people are ill informed, they are short sighted, they can't see what's going on around them, or maybe they just don't want to. These people are the unsuccessful ones, whose only motive for their negativity, is to try and bring others who are successful, down. I steer clear of negativity like that.
Today's market is not a crash, it is a correction, interest rates and unemployment are still historically low , we have had many corrections in the past and will have many more. Success in this market is being able to recognize the difference. I have gone through this many times and I can help you find an investmstment property with nothing but an upside for you!
In the early 80s, right here in the Vancouver and Lower Mainland area, we did have a rough market for a very short time. Mortgage rates were as high as credit card interest rates, and unemployment was at an all time high. For those who were working, wages were low. Due to so many people dumping them, average house prices were around only $125,000.00. There was only one major trading partner in Canada, the U.S., who basically dictated our fortunes, in their favour. The population was actually shrinking, and the main industry, logging, was faltering. Our sea port was almost non existent. Due to better employment and wages, there were actually some small towns in B.C., that were enjoying a population increase, and higher property values than we were!
Compare that to now. The population in the last 25 years has nearly doubled, and forecast to double again in so many years. Unemployment is at an all time low, and those who are working, are enjoying some of the highest wages in the modern world. Interest rates remain low, logging as an industry, is now rivaled by many industries, from tourism to high tech manufacturing and oil. We have trading partners such as China who is about to surpass the U.S. as our largest, forcing the U.S., to be much more competitive and fair with Canada. Our seaport today is among one of the busiest in the world. The average price for a detached home is over $500,000, a bargain compared with most other world class centres around the world. What started this?
Expo 86'! It put Vancouver on the world stage, and we are becoming a world class city just like many cities in Europe, Asia and even the U.S. Cities like Rome, Paris, Hong Kong, San Francisco, and as a matter of fact, 89 other cities in the world, have higher average prices than we do. Some are 4 times higher that of Greater Vancouver.
Are these economic factors going to change? Not likely. Banks are making record amounts of money by lending as much as they can. They will resist huge interest rates, and will continue being as aggressive as they can, in order to loan money out. Canada cannot have a viable economy and compete with the rest of the world unless it increases in population, so, the Canadian government is now revising the Immigration policy to make it easier for people to come here. Think about it...Canada being one of the largest countries in the world, has a total population that's less than some major cities in other countries! Canada has nowhere to go but grow, with the Westcoast being the most desirable! Also the Canadian government is working hard to implement new tax incentives in order to attract more major industry.These are just a few of the positives going on.
Developers are responding to this by building more apartments/condo's, so those who cannot afford the high cost of detached property can, and will find somewhere to live. Apartment living is the norm in most major cities in the world.
DO YOU WANT TO INVEST?
If you can afford it, YOU BET!! If you can't... find a way! Aquiring rental property is not too difficult if you follow a few simple rules. Again, you will need an experieced agent for this, preferably one who even has personal experience with rental properties.
I have for more than 15 years been, and continue to be a landlord. Let me tell you, it is not as easy as it sounds. " Buy a house, and collect the rent". If it could only be that easy. This is the first rule... be prepared for stress! All the tenant's problems are now yours! Tenants also decide that sometimes, they can't pay the rent on time. However you still have to pay your mortgage. I have had many a sleepless night because of tenant problems, none that could not be overcome but definitely stressful. You ever heard the term "no pain , no gain?". You repeat that to yourself over and over, and that's what gets you through the rough spots. Also, I have always believed in this saying, " successful people do the things unsuccessful people will not do ". I told you earlier in this website, I'm not going to sugar coat anything. It does go smooth for periods of time, but if you can't handle the stress of managing other people's problems, don't become a landlord. Because of unscrupulous landlords in the past ,the Landlord Tenant Act does favour the tenant, and that's another issue. You can get management companies to help relieve some of this, but they do take a good chunk from your revenue.
The next rule is, you must be able to afford it, and hang in there through a downward blip. It's nice when you have enough down, where the rent will carry, but if you can afford a shortfall every month, that's OK too. I see many people making $800.00 a month,payments on expensive cars... to me, more than two thirds of that, is a shortfall every month. A car with payments of $300.00 will get you to the same places. And when you sell that expensive car, that money is gone forever! However if you had a shortfall on your revenue property, it will have created a lot of wealth when you sell it.
As I have said before, many types of investments have created wealthy people, but none of them have created more wealthy people than Real-Estate has!
Some of what I said here is fact, and some is in my opinion. My interpretation is based on my daily Real-Estate experiences, and on what I read and listen to. The only one who can make the final decision is you. I'm here to help you with that decision, and I will not let you down when you hire me to get the job done.
Today's difficult market is a great buying opportunity. Contact me and I will tell you why. There are many strategies that I employ in securing great deals in today's tough times.
