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In the Press

Research key to real estate

Review goals, local market, population growth, say experts

Rakshande Italia, CanWest News Service
Published: Monday, March 26, 2007

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 two-fold: ongoing cash flow and capital appreciation.

Herewith, 10 steps to becoming a real-estate mini-mogul:

1. Evaluate your existing 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 Bank of Montreal 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 really 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.

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. But don't let a single booming industry (such as automotive) or one high-growth sector (such as oil) influence long-term investing decisions.

4. 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 of Remax Realty Specialists Inc. Brokerage in Brampton, Ont. Keep on top of real-estate rules by contacting the governing bodies in the industry.

6. Use a broker who specializes in real-estate investing.

7. Start small. For the first-time investor, Britto recommends trying a free-hold townhouse (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. In bigger cities such as Vancouver, new immigrants prefer to rent at first 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 is crucial to determine whether the provincial and local political leadership creates a "growth atmosphere."

9. Is the area attractive to baby boomers? Check whether there are lifestyle options such as parks and recreation facilities nearby.

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 country's suburbs and bedroom communities.

© The Vancouver Province 2007