Flipper or investor? Find your comfort zone
http://www.canada.com/vancouversun/news/story.html?id=ea7d886e-f24f-406c-96a9-9ae835f70c58
- “That is the thrill a flipper lives for -- fast cash. But don't fool yourself: A flipper is not an investor looking for safety first. Paying $800,000 for a condo downtown and renting it for $2,500 is not an investment, it's a gamble on a higher priced sale in the future. Flippers often get caught in downturns, you must be able to weather one, when it comes.”
- “To buy real estate in 2008 will feel as troublesome as it did in 1966 or 1975 or 1983 or 1988 or 1991 or 2001 when we had all these troubled events (stock crashes, crisis, troubles) the previous year. And aren't you happy you bought then?”
- “For all the 38 years I have been in this business there are the same stories every year.
There are too many Realtors in the business.
No young couple can afford to buy anymore.
I wish I bought 5 years ago.
Every Year!”
- It’s a B.C. based article, but it makes some great points, specifically that;
- Flipping is not investing, it’s speculation.
- If you base your buying decision on future appreciation, you can end up in trouble very quickly if the markets turn.
- On the other hand, if you buy a property that provides a positive cash flow from day 1, and it’s an attractive property to renters, the market appreciation is just a bonus as you’ll get positive cash flow monthly regardless of what the market does.
- The headlines will always give you reasons not to invest, but five years from now you will regret not buying. The real estate market always goes up over the long term.
- When you do invest, it’s important to follow a proven system that has built-in safety nets for things like maintenance and vacancy.
Home prices rise in first quarter: report
http://www.canada.com/ottawacitizen/news/business/story.html?id=b7c64e55-0e0a-46c1-bfb1-5b9de97b8d6b&k=88167
- "Nationally, the average price of a detached bungalow climbed 8.3 percent to C$336,834 ($333,857) in the first three months of 2008, according to Royal LePage Real Estate Services' latest House Price Survey.”
- "In Calgary, Alberta, Canada's oil industry capital, the price for a standard detached bungalow climbed 9.9 percent to C$442,852”
- This shows just how strong the entire Canadian economy is, and further how strong Calgary is doing.
- What this article also shows is how negative stories sell. The article says “Despite the strong oil and gas economy in the province of Alberta, increases in home prices there have moderated from the frenetic pace of the past few years”, but a 9.9% increase is a HUGE increase of the market – just spectacular!
- Even better – if you dig a bit, you’ll see that the Calgary market went up 9.9% during the same period the Dow Jones Industrial Average (DJIA) went *DOWN* 4.61%
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