Real estate remains a strong investment

These days it seems the everyone in the media is talking real estate. With words like "boom" and "bust," so called "experts" are discussing the latest trends and what they may mean for the housing market. They point to real estate's supposed "cyclical" nature and eagerly anticipate the industry's next "crash."

While these experts are right in the suggesting that, like the economy itself, over time the real estate market will invariably ebb and flow, they fail to acknowledge what true real estate insiders know - that savvy investments, made with good advice, based on sound principles, will always succeed.

Even in the most uncertain economic times, history shows that real estate is one of the soundest investments a family can make. During the Great Depression of the 1930s when the stock market plummeted by as much as 89 per cent, housing prices only dropped by 39 per cent. And during the infamous recessions of the mid-1970s and early 1980s, housing prices actually rose by an average of 10 per cent.

Clearly, economic research into North American housing trends indicates that home prices historically have remained consistent with, if not appreciated faster than, the rate of inflation. Since 1990, with inflation hovering at about four per cent, house values in the U.S. have outpaced inflation, appreciating by approximately five per cent nationally.

Analyses of Canadian real estate trends echoes these U.S. results and amplify a continental opinion that real estate ownership remains one of the best, most consistent investment vechicles available. The recent growth in the condominium market, and the increase in investment opportunities it has produced, has further supported our optimism about the Canadian real estate market.

Of course, while no investment opportunity is guaranteed, we believe that there are some simple tips today's condo investor can follow which will better prepare them for success.

Top 10 Condo Investing Tips

  1. Trusted advisors - Obtain sound advice from investors who are already successful. Friends and realtors can refer you to folks who have proven investment track records.
  2. Know your goals - Define your investment goals for the short and long term. Do you want to buy a condo to live in, to fix and sell, or to hold for your future?
  3. Study hard - Read real estate investment books and articles, attend workshops and seminars, while avoiding out-of-date infomercials.
  4. Find the right lender - Choose a lender with great service, a good closing record and fair costs, and get pre-approved for financing.

  5. Know your market - Define your target locations and become an expert. Study real estate magazines and newspaper sections and note sales prices in your target area.
  6. Connect with agents - Interview successful and well respected real estate agents and learn from them. You're looking for agents who know your target market thoroughly and will work hard to find properties for you.
  7. Find the right lawyer - Find a good law firm and use them for every transaction. They'll know your needs and will quickly learn how to expedite your transactions.
  8. Become reno savvy - Study home remodeling techniques by reading design magazines and books. Learn the cost of materials, supplies and building trader by visiting home improvement warehouses and talking with remodeling professionals.
  9. Be realistic - Make "reasonable" offers on properties asking for great terms and concessions from sellers if it makes sense. The more realistic offers you make, the greater your chance of success.
  10. Consider your exit strategy - Always have your transformation in mind. It will speed turnaround time and save you money on mortgage payments.