Here at HME Group, we help you achieve your lifestyle goals and pursue your dreams through safe, informed investments in real estate while delivering unparalleled value and service. We want to weed through the hype, headlines, and media and make wise decisions based on fundamentals and economics.
In this blog post, we sit down with Ken Tucker from Dominion Lending Centers to talk about what this market is really doing, how investing in real estate is still a safe and smart option, why purchasing a home now is a good idea, and why we don't recommend preconstruction.
When we look at Real Estate over the last 100 years we see that everything cycles BUT the most important part is that historically real estate on average doubles every ten years, regardless of any correction happening in between. People often take the wrong approach with Real Estate they look at what the market is doing right now and then interact with it, instead, we need to do long-term planning. When people look at real estate as instant money they can get into major problems. It is important to have someone run the numbers and analyze them to make sure it's the right decision for you.
Real estate has proved to be a very safe investment over time because it is one of life's necessities, everyone needs a place to live. It is hard to lose when the demand is higher than the supply. Here in Canada, we have 400,000 new legal immigrants coming here every year who all need somewhere to live. The demand for real estate is HIGH! So when it comes to purchasing an investment property it's important to look at the fundamentals.
FUNDAMENTALS OF REAL ESTATE:
1. Location Location Location - Look at the economical growth, transportation, employment, local businesses.
2. Cash Flow - Will the property pay for itself?
As long as you have these things regardless of what is going on in the market you have sustainability. And if you are buying real estate to live in there is never a wrong time to buy as long as you buy within your budget.
Now let's talk about preconstruction. Ken really doesn't love preconstruction and here is why - it can change so quickly. The market can change in the middle of construction, fees can change, interests rates can change, people can pull out. Now we are not saying this is a wrong decision for everyone, we like to take the approach of a turtle not a rabbit. Many people have made a lot of money with preconstruction, you just really need to time it right and be willing to take a risk.
Now that we have seen the market cooling off there are a lot of opportunities. So as long as you do your home work, buy what you can afford, you will end up on top when you play the long game.
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