experts: real estate column Monday, November 19, 2001

Don't just think about investing - do it

Ignore the gloomsters: the property market still gives you the best dollar return on your money that you'll ever get

By Ozzie Jurock

This article appeared in The Vancouver Sun on November 17, 2001

House hunting is a little like duck hunting ... When duck hunting one has to lead the duck. You have to shoot ahead of the duck so that you allow for the distance the duck is going to fly while your shotgun pellets are getting to him. If you don't you'll always be shooting where the duck was, not where the duck is. Same thing with the real estate market. It is always changing. Nothing ever stays the same. You have to know what's happening with those aspects that involve your potential purchase or the management of your existing property portfolio. If you don't you'll pay in real money for that ignorance.

This applies whether you are a big investor or a small investor. There are all kinds of differences between the big investor and the small investor but the cost of ignorance is the same. It is a matter of degree not a matter of kind.

Regardless of your size one of the most important factors is understanding yourself. Understanding yourself can turn you from a small investor into a large one. Understanding yourself in this economic environment is the most important.

Daily I listen to: 'Yeah but this market is different...' Yet, as I pointed out two weeks ago, no matter the dire news of the last 30 years in BC ... the real estate investor was well off. So, if buy good selected real estate, manage it well, have someone else pay off the mortgage, you will benefit. Particularly in this lowest of all interest rate and vacancy rate environments. With 25% down most properties today (well bought ones) show you a double digit return.

Plus the markets are active ... very active ... In fact, the low interest rates and the great returns have brought out buyers in droves right across the country ... Volume is sharply higher in October from Kamloops to Toronto and prices ... well, look for yourself.

 
Sales
%
Price
%
 
2001 2000   2001 2000  
Toronto 5,021 4,696 +15% 251,500 245,300 +03%
Edmonton 1,409 1,122 +25%! 152,500 140,100 +08%
Calgary 1,821 1,618 +12% 181,600 175,400 +04%
Vancouver 2,453 1,836 +33% 285,500 285,000 +00%
Fraser Valley 1,152 859 +23% 251,200 254,000 -01%
Van. Island 453 360 +21% 144,700 146,600 -01%
Kamloops 167 119 +29% 125,600 129,500 -03%
Victoria 534 482 +10% 263,800 259,500 +02%

Add to this sharply shrinking listing inventories (as owners hold off) and you can see that savvy buyers shrug off the barrage of news and leap into this most affordable of all interest environments with a passion. Best month ever in Edmonton, best October in Calgary, best ever (just October 1997 was close) in Toronto. The Chinese symbol for danger also mean opportunity. To find opportunity you have to DO something Do not be scared into in-action. Do something.

There are still condos is Surrey selling for $73,000 that rent for $750 in high quality non-leaking buildings, that with 25% down earn 16% cash on cash ... even if they never appreciate. Small apartment buildings in the Westside show 8 - 10% returns (how much are you getting at the bank?).

On my website I talk about: "There are no good or bad markets, only good and bad deals." I have seen the absolute worst deals in the so-called very best markets (i.e. some condo hotels) and I have seen the very best deals in poor markets. I have listened to the gloom and to the boom. Every year for thirty years somebody tells me that there are too many Realtors in the business, that no one can afford to buy anymore (Yep, they said it in 1969 too) and then they say: "I wish I had bought 10 years ago ... "

Good times, bad times. There will always be the gloomsters. Don't become involved with them. Prices rise on properties in places where people want to live, like BC. Real estate ownership is the greatest wealth builder for individuals of all time. It always has been and it always will.

Yes, and that applies to the world after September 11, 2001 too.

Ozzie Jurock is the publisher of Jurock's Real Estate Insider an independent real estate advisory service. You can reach him at 604-683-1111 or e-mail ozzie@jurock.com




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