Great article about the value of Victoria real estate

Real Estate Sales Representative with Holmes Realty Ltd 42

And I'm not just saying that because my boss wrote the article, it's actually very good advice!

Please click below for the article as published in this month's "What's Up" magazine.

"The Value of Real Estate", by Richard and Mike Holmes. 

Key Points -

  • Victoria, due to geography and other elements, has limited space for expanded growth outwards, which helps to keep values stable.  Climate and social elements also keep Victoria in demand. 
  • Utilizing leverage in real estate can result in high rates of return, even when values increase only modestly. 

Now, because I can't help myself, my 2 cents (Which, if leveraged properly, could result in at least a dimes profit!). 

I'd like to talk about timing the market. 

Ok, sometimes you don't have a choice of when to buy or sell.  Life brings circumstances which are sometimes out of our control.  But many first-time buyers sit on the fence, when they COULD buy, because they don't know if it's the right time.  They are concerned they may be paying too much. 

I'm value conscious (Cheap!), and I don't like to pay too much myself.  But I also look at value relative to the market.  It's really difficult to negotiate on a property based on where we "think" prices will be in 6 months.  A good deal is always relative to the market we're in.  

So, first rule of timing the market, is be willing to work WITHIN the market as it exists, or WAIT (on the fence) until the market clearly shifts (which it may or may not do).  Key, be clear in what you're doing. 

The second rule is, if you ARE waiting for the market to shift, if you are using the media as the indicator, you are too late.  In other words, the media won't be reporting that prices have "hit bottom" until some time AFTER they've begun to rise.  Savvy investors (not just in real estate), don't try to buy at the bottom, but NEAR the bottom, nor do they try to sell at the top, but "near" the top.  Real estate has yearly cycles which you can benefit from, as well as longer term cycles.  Ask me about this. 

The third rule is, price isn't everything.  If you can afford to buy now, you may not be able to afford to buy later.  Interest rates change, lending rules shift, credit ratings alter, etc.  Getting your foot in the door, for a first time buyer, is one of the most difficult things to do.  My advice is, if you can afford to buy, buy.  Get your foot in the door and then go along for the ride.  Short term may be difficult, but long term benefits are amazing.  Also related to this...  When there is uncertainty in the market, it is SO much easier to negotiate favourable terms on a property, and there is SO much more selection and SO much less pressure.  Ultimately, if it's a home, you have to live there, so be sure to buy not only based on value. 

In the 1970s and early 80s you could buy a home for $100,000.  Do you think the person who paid a bit too much, say 10% over market at the time, regrets their decision to buy?  How are they feeling about their investment today?    



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