The Ripple Effect
This investing fundamental can be seen as a strategy for investing in real estate. That is, once you understand how it works you can use it as part of your investment property strategy.
The Ripple effect is very much like it sounds. Simply put, if you drop a pebble in a quiet still pond, the pebble hitting the water will create a "ripple effect" of water movement away from the centre in concentric circles. And the further out the concentric circles travel the less of a disturbance it creates. That is, the effect diminishes as it travels outward away from the centre.
Economic changes in any city or town will have the same affect on real estate investing. And please note this works for positive changes as well as negative... For example; recently in the Barrie and Orillia area it was announced that Skyline Investments was planning on developing the Port Mcnicoll waterfront with approximately 900 new homes. For a small town of about 2000 people, that is about a 40% increase in the existing population (rough figures). The ripple effect states that Port Mcnicoll will see the greatest change ( i.e. positive real estate change). The surrounding towns of Victoria Harbour, Midland, Warminster, and Coldwater, will see a lesser change ( positive growth) and as the affect travels outward less and less.
However let's consider the "size" of the pebble that hit the water. A very large stone would create larger waves that have the strength to travel further outward. In our example Skylines Investment is considered such a stone. The town of Port Mcnicoll is small relative to the huge change ( new development of 900 homes in a town of only 2000) that is coming. Therefore because of the size of the "stone" being dropped, the affects on real estate will be felt all the way over to Orillia, Barrie, Wasaga Beach, Collingwood and all points ( small towns) in between.
For proper real estate analysis, ripple effects are happening all the time. Its like rain drops on the pond. We as investors have to find the effectual change that is the largest in terms of potential real estate and property growth. And then combine that with other real estate investing fundamentals to make your investment decision.
And from this synopsis let's now add another stone into Simcoe County's pond and add the new GO train that just started taking passengers into Toronto everyday. The new GO train is a perfect example of the ripple effect at play. Nearby homes and properties within months of the new station opening in the south end of Barrie have gone up in value already. The ripple effect of this nature can be felt as far away as Gravenhurst, Collingwood, and even Alliston to the south.
All these investing fundamentals are to be used in conjunction with each other. Please invest wisely, taking into consideration as many factors as possible to make an educated property investment. We at Mana Investments are here to help, please feel free to contact us on any property investment that you may need help in.
Mark Vosylius
(705)-812-1033
Email: mark(at) manainvestments.com
Mana Investments - www.manainvestments.com - Using RRSP's as 2nd mortgages, we work with real estate professionals and joint venture partners achieve wealth through real estate investing. We specialize in using RRSP as for real estate investing in Barrie, Orillia, Collingwood, Midland and the Muskoka's
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