Road to real estate wealth paved with research
Budding moguls need good advice
Rakshande Italia, CanWest News Service
So, you want to invest in real estate and get rich fast? You're living in an infomercial. Experts say the secret to successful real estate investing is research, research, research.
Review your moves, get good advice and look for clues in sources such as the new Canadian census data. The payoff is twofold: ongoing cash flow and capital appreciation.
Herewith, 10 steps to becoming a real estate mini-mogul:
1. Evaluate your current exposure. "People who already own a house should make sure they evaluate the percentage of real estate exposure already in their investment portfolio and then decide if they want to invest more," says BMO economist Michael Gregory. "Evaluate whether the benefits you earn from tax breaks on your second house are worth the risks associated with investing more."
2. Identify what is it you want from the property. "Do you want to make a quick $30,000 in a very short period of time or would you be happy with earning $800 to $1,000 a month for the rest of your life?" asks Ozzie Jurock, former president of Royal Le Page and a Vancouver- based real estate author and TV personality. Jurock says investing in smaller towns is a good bet because even if the property doesn't substantially appreciate, one can always be assured of a fixed income for life through manageable rents.
3. Ignore national statistics. Focus on the numbers and trends that directly affect your market. Check if population growth, average income and job creation are faster than the provincial average, say experts. Also key is whether a major transportation improvement is occurring nearby. And don't let a single booming industry (such as automotive) or one high-growth sector (such as oil) influence long-term investing decisions.
4. Is the area's affordability index in the hot zone (between 25 and 39 per cent)? RBC puts up a free affordability index chart on its website that can help investors. Experts say you don't want the property to be too expensive or too cheap: Too cheap and the renters become buyers; too expensive and property values may stall.
5. Buyer beware is still the golden rule, says Maria Britto, former president of the Brampton Board of Trade, and realtor at Remax Realty Specialists Inc. brokerage. Keep on top of real estate rules by contacting the governing bodies in the industry, such as the Canadian Real Estate Association, says Britto. For example, recent rule changes mean agents now need to sign contracts with buyers in an arrangement similar to what they do with sellers.
6. Use an experienced broker. Once you get your research done, use a broker who specializes in buying and selling houses for real estate investing.
7. Start small. For the first-time investor, Britto recommends trying a free-hold townhome (which doesn't have maintenance fees). "These are not only affordable, but there's always a good supply and demand for them and they can give you an affordable income," she says. This holds true in bigger cities such as Toronto, Vancouver, Montreal and Calgary, where immigrant populations are high. New immigrants prefer to rent for their first few years in the country and they tend to choose locations close to transportation systems, malls and grocery stores.
8. Is the location forward looking? Don Campbell, author of 97 Tips for Canadian Real Estate Investors, says it's crucial to determine whether the provincial and local political leadership creates a "growth atmosphere." One way to tell is by looking at whether the region's economic development office is helpful. If it's difficult to deal with, you can assume it will be the same in its dealings with potential employers looking to move to the area, says Campbell. Also, check to see whether the area's infrastructure -- sewers, commercial and industrial space -- is being built to handle future growth.
9. Is the area attractive to baby boomers? Check whether there are lifestyle options such as parks, recreation or water facilities nearby. The 2006 StatsCan census data shows that places such as Wasaga Beach and a neighbouring Ontario township called Tiny have seen an increase in population of 21 and 19 per cent, respectively, since the last census as baby boomers move in.
10. Think suburban. The 2006 census report talks of the suburbanization of Canada. Larger lots and lower real estate prices are drawing more people to the suburbs and bedroom communities that are mushrooming across the country. For example, Chestermere, outside Calgary, has grown by 148 per cent.
© The Calgary Herald 2007 Published: Saturday, March 24, 2007
Thursday, March 29, 2007
Thursday, March 22, 2007
News from Calgary Herald Published: Wednesday, March 21, 2007
U.S. housing woes won't hurt our homes and native land
As Canadians read alarming headlines about overstretched U.S. homebuyers threatening that country's financial system, they can keep one comforting thought in mind: it's simply not happening here.
The term "subprime," once an obscure bit of financial jargon, has become a staple of business news reporting over the past few weeks.
It refers to those with marginal credit who have nevertheless managed to take part in an American residential real estate boom, thanks to lenders who stretched lending standards to the limit and past.
Now, these shaky mortgages are going sour, just in time to hit the U.S. economy when it's already slowing.
Canada has its own economic strains, and if these housing problems take down the stock market or the U.S. economy, we'll certainly feel some pain.
But not as much as our neighbours, largely because mortgage and housing markets, which are fundamental to the financial position of consumers, look quite solid in Canada.
Benjamin Tal, an economist at CIBC World Markets, has kept a close eye on the mounting stresses evident in the U.S. mortgage market and has come to two key conclusions.
First, there's no excuse for anybody to be surprised at the troubles in the U.S, which could be predicted months ago -- like the arrival of a freight train that's already visible on the horizon.
Second, there's no parallel in Canada, whose mortgage lenders remained safely stodgy even as those in the U.S. went wild in a speculative market where it seemed impossible to lose money -- until the market crumbled last year.
Says Tal: "They really pushed the envelope. We didn't even touch the envelope."
Some of the worst excesses exploded in the overheated market that arrived in 2004: interest-only mortgage loans that required no repayment of principal; "liar loans" that didn't require borrowers to provide proof of income; and option ARMs, mortgages that let borrowers forgo payments, piling new debt on top of the original amount.
A particularly widespread abuse was the offer of ultra-low "teaser" interest rates -- including to those with poor credit -- that could be reset as much as several percentage points higher after two or three years.
Obviously, any already stretched borrower would be unable to withstand a huge jump in interest payments, but by the time the defaults began, these mortgages had usually been packaged into bond-like securities and peddled to other financial institutions.
Tal was among those warning of the coming wave of mortgage problems last year. Five months ago, he noted the huge wave of adjustable-rate mortgages that climaxed in 2004 and 2005, as housing prices peaked, would have their interest rates reset upward beginning in the fall of 2006, leading to two years of severe stress on borrowers.
How severe? Well, the value of mortgage loans now being reset is $2 trillion (yep, that's 12 zeros) and Tal's estimate is that mortgage payments on these loans will jump by an annual average of $35 billion to $40 billion through late 2008.
This alone isn't enough to tank the huge U.S. economy, but it's plenty stressful to those exposed to this large chunk of loans. And if the stresses trigger problems in broader financial markets, all bets are off.
Now, the good news. For once, Canadians can be happy to be boring. Many of us might have been happy to take one of these free-lunch mortgages with a hidden bellyache, but our banks didn't let us.
That helped keep household debt from exploding as it did in the U.S. (up nearly 70 per cent in the past four years versus 40 per cent in Canada.)
For example, sub prime loans make up 22 per cent of new mortgages in the U.S. versus just five per cent here. Interest-only mortgages, a product that can help a borrower stretch her borrowing to the limit, amounted to 20 per cent of new loans last year in the U.S; but only one per cent in Canada.
One result: house prices didn't explode here because the ultra-easy money to finance a bubble wasn't available. So we're in a position a little like that of 2001, when the collapse of the tech bubble brought a recession in the U.S. but not in Canada, largely because we just didn't have a big tech sector.
Today, real estate accounts for 31 per cent of U.S. household assets, much of it financed by shaky loans. It accounts for just 21 per cent in Canada, and only a tiny percentage of mortgage loans is of dubious quality.
As Canadians read alarming headlines about overstretched U.S. homebuyers threatening that country's financial system, they can keep one comforting thought in mind: it's simply not happening here.
The term "subprime," once an obscure bit of financial jargon, has become a staple of business news reporting over the past few weeks.
It refers to those with marginal credit who have nevertheless managed to take part in an American residential real estate boom, thanks to lenders who stretched lending standards to the limit and past.
Now, these shaky mortgages are going sour, just in time to hit the U.S. economy when it's already slowing.
Canada has its own economic strains, and if these housing problems take down the stock market or the U.S. economy, we'll certainly feel some pain.
But not as much as our neighbours, largely because mortgage and housing markets, which are fundamental to the financial position of consumers, look quite solid in Canada.
Benjamin Tal, an economist at CIBC World Markets, has kept a close eye on the mounting stresses evident in the U.S. mortgage market and has come to two key conclusions.
First, there's no excuse for anybody to be surprised at the troubles in the U.S, which could be predicted months ago -- like the arrival of a freight train that's already visible on the horizon.
Second, there's no parallel in Canada, whose mortgage lenders remained safely stodgy even as those in the U.S. went wild in a speculative market where it seemed impossible to lose money -- until the market crumbled last year.
Says Tal: "They really pushed the envelope. We didn't even touch the envelope."
Some of the worst excesses exploded in the overheated market that arrived in 2004: interest-only mortgage loans that required no repayment of principal; "liar loans" that didn't require borrowers to provide proof of income; and option ARMs, mortgages that let borrowers forgo payments, piling new debt on top of the original amount.
A particularly widespread abuse was the offer of ultra-low "teaser" interest rates -- including to those with poor credit -- that could be reset as much as several percentage points higher after two or three years.
Obviously, any already stretched borrower would be unable to withstand a huge jump in interest payments, but by the time the defaults began, these mortgages had usually been packaged into bond-like securities and peddled to other financial institutions.
Tal was among those warning of the coming wave of mortgage problems last year. Five months ago, he noted the huge wave of adjustable-rate mortgages that climaxed in 2004 and 2005, as housing prices peaked, would have their interest rates reset upward beginning in the fall of 2006, leading to two years of severe stress on borrowers.
How severe? Well, the value of mortgage loans now being reset is $2 trillion (yep, that's 12 zeros) and Tal's estimate is that mortgage payments on these loans will jump by an annual average of $35 billion to $40 billion through late 2008.
This alone isn't enough to tank the huge U.S. economy, but it's plenty stressful to those exposed to this large chunk of loans. And if the stresses trigger problems in broader financial markets, all bets are off.
Now, the good news. For once, Canadians can be happy to be boring. Many of us might have been happy to take one of these free-lunch mortgages with a hidden bellyache, but our banks didn't let us.
That helped keep household debt from exploding as it did in the U.S. (up nearly 70 per cent in the past four years versus 40 per cent in Canada.)
For example, sub prime loans make up 22 per cent of new mortgages in the U.S. versus just five per cent here. Interest-only mortgages, a product that can help a borrower stretch her borrowing to the limit, amounted to 20 per cent of new loans last year in the U.S; but only one per cent in Canada.
One result: house prices didn't explode here because the ultra-easy money to finance a bubble wasn't available. So we're in a position a little like that of 2001, when the collapse of the tech bubble brought a recession in the U.S. but not in Canada, largely because we just didn't have a big tech sector.
Today, real estate accounts for 31 per cent of U.S. household assets, much of it financed by shaky loans. It accounts for just 21 per cent in Canada, and only a tiny percentage of mortgage loans is of dubious quality.
Jay Bryan is a columnist with CanWest News Service
© The Calgary Herald 2007
© The Calgary Herald 2007
Thursday, March 15, 2007
Wednesday, March 14, 2007
Realty Executives France
Realty Executives France is now open, you can consult the website: www.realtyexecutives.fr, only in French... :) The First office is in Dunkerque (north of France) if you go there, stop to say HI to the guys (Ben, Bastien, Henry, Steeve)
Market graph , for February
Here the market graph who explain my thinking of what happened this month on the market
Welcome on my blog
Dear Visitors,
I have created this blog to keep you informed on the real estate market in Red Deer,and to give you more information about real estate...
I have 34 years of sales experience which has given me the ability to understand the changing market place and to quickly identify the needs of my clients.
I received a Business Administration Diploma from SAIT in 1974 and moved to Red Deer in 1977. I then started and owned a chain of retail stores in Alberta and Saskatchewan. In 1997, I began working in Real Estate, bringing with me many marketing courses, Real Estate appraisal courses and a great enthusiasm for working with people.
I have drawn on 34 year’s experience to develop an extensive database of Buyers, Sellers and Investors who rely on me for my professional opinion and assistance.
With an eye on personal quality service, and a professional approach to the Real Estate business, and the resources of Realty Executives Devonshire Realty Inc., I offers my clients unparalleled service and results.
YOU CAN ALSO VISIT MY WEBSITE : www.reddeerrealestate.com
I have created this blog to keep you informed on the real estate market in Red Deer,and to give you more information about real estate...
I have 34 years of sales experience which has given me the ability to understand the changing market place and to quickly identify the needs of my clients.
I received a Business Administration Diploma from SAIT in 1974 and moved to Red Deer in 1977. I then started and owned a chain of retail stores in Alberta and Saskatchewan. In 1997, I began working in Real Estate, bringing with me many marketing courses, Real Estate appraisal courses and a great enthusiasm for working with people.
I have drawn on 34 year’s experience to develop an extensive database of Buyers, Sellers and Investors who rely on me for my professional opinion and assistance.
With an eye on personal quality service, and a professional approach to the Real Estate business, and the resources of Realty Executives Devonshire Realty Inc., I offers my clients unparalleled service and results.
YOU CAN ALSO VISIT MY WEBSITE : www.reddeerrealestate.com
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