So what was I thinking when prices for real estate were as low as they were? I have asked myself that question a few times. In St. John's we have seen real estate prices surge in the last three years. Those who were "smart" enough to buy investment properties with record low interest rates and un-inflated real estate prices have enjoyed one of the best growth markets in North America.
I have been in the real estate business for over 21 years and have had the opportunity to buy rental properties several times; but I did not do it. Well, I did not buy them to the extent that I might have or dare I say, even should have. Instead, I invested some of my hard earned cash in the stock market. With the exception of a few lucky trades, I watched my invested assets dwindle to losses or at best remain flat. Oh what a feeling when a plan doesn't come together!
Well during this past year, I have begun to correct this imbalance. I have purchased a couple of homes and am in the process of building a two more within the next two years. If this sounds like I am crazy, I remind you that the I thought the same way five years ago about buying real estate then. The reality is, Newfoundland has an oil based economy and this oil prosperity is certainly not done yet. Those who can accumulate a few rental properties over the next ten years will no doubt build some equity for their future.
Another factor for me is there are no real estate firms that offer a pension plan in our local market. Buying rental properties is one thing that make some sense in terms of generating income for the future. Yes, prices have moved up already. But unless the Newfoundland economy turns downward or the oil boom dies prematurely, it is more likely that real estate prices will be higher in five years than they are today, even though they may seem high to us right now.
If you are hoping to gain from this growth market you might want to give your head a shake as I did and buy a piece of real estate. Otherwise, it is likely in a few years time you will be asking yourself the same question. "What was I thinking when the prices were low?" And in case you haven't noticed, interest rates are still sitting at all time lows. Furthermore, to underscore the point a little more, the vacancy rate in St. John's is now at 1.1%. See CMHC News April 2010.
About the Author: R. Greg Osmond is a Platinum Award winning Realtor dedicated to serving the people of St. John's, Mount Pearl, Paradise, Kilbride, Goulds, Conception Bay South (CBS), Portugal Cove-St. Philips, Torbay- Flatrock- Pouch Cove, and Logy Bay - Middle Cove - Outer Cove, Newfoundland and Labrador. For over 21 years Greg has been practicing in Real Estate. He can be reached at 709-895-2500.
Want to get in touch? Email email@example.com. For more information, please visit http://www.rgregosmond.com. Thinking of selling your home? I have a passion for helping my clients with buying and selling real estate! If there is any way I can be of service to you today, please feel free to contact me!