We're heading off a little late for our holiday vacation. We'll be back in January! Have a wonder winter holiday and a great 2010!
Todd and Danielle Millar
Thank you for this wonderful year. We appreciate all your calls, emails, thoughts and comments. You are a joy to know and work with.
Our offices will be closed from December 24th to January 5th for holidays. We're looking forward to catching up with you again in the New Year!
Warmest regards,
Todd, Danielle and Ronan.
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What was the most important thing of the last decade for you? Has anything special happened in your life? I’ve spent the whole decade in Japan. I’ve had too much fun to go home! It’s been a great experience that has shaped my life incredibly.
Here is a quick list of some major inventions/advances in 1900-1910 and 2000-2010.
Some Inventions of 1900 – 1910
Airplane
Teddy bears
Windshield wipers
Crayons
Vacuum cleaners
Ford Model T automobile
Popsicle
Teabag
Escalator
Instant coffee
Some Inventions of 2000 – 2010
Artificial heart and liver
Self –cleaning windows
Hybrid Cars
Youtube
iPod
Ka-on plants that play music
Murata boy – bike-riding robot
Sony’s Sugar Battery
Flying Windmills
Face transplants
“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”
-Theodore Roosevelt (1858-1919)
How can you grow your money in real estate?
Owning a quality property in a stable market with strong economic fundamentals is like having your own perpetual money machine.
Take this property for example:
Case Study 1 - Cumberland Purchased 2005
Attractive home near developing portion of the Anthony Henday ring road. When ring road is finished, accessibility to city center and oil refineries will be greatly increased, furthering profits.
Well situated near schools, city transit and bike paths.
Purchased Price: $160,000 Current Value: $360,000
Total Investment: $65,000* Monthly Cashflow: $350
Partner’s R.O.I is 146% - $100,000 profit to date.
* Inclusive of all costs from purchase to sale
“If you would have invested in Case Study #1 in Edmonton September 1, 2005 by September 1st, 2009 you would have realized a $94,900 CAD profit (before taxes).
That works out to $65.00 CAD per day.”
Of course not all years are like this and that is why we are conservative in our estimates. We know that markets go up and down. We balance our investments to perform well in both up and down cycles allowing us to deliver consistent returns.
"Winter Light’s mission includes promotion and collaboration with Edmonton’s existing winter festivals, Deep Freeze; Ice on Whyte and Silver Skate Festival as well as new programming, Winter Light Welcome tents and special events will take place in the context of all three events."
"I think winter has been one of Edmonton’s best kept secrets for too long," says Anthony. "Our goal is to showcase all the wonderful aspects of our winter city – the incredible recreation opportunities, the gorgeous river valley environment, and the culture and heritage of winter peoples."
So instead of grumbling and running to our cars to avoid certain frostbite. Lets look around, smile and say, "It's the most wonderful time of the year!"
Does snow make everything ok? Remember the first heavy snowfall of the year. You're out walking with warm mitten clad hands, toasty boots and a gut full of cocoa or perhaps a nice cognac for those so inclined. As you walk you can hear the crunch-crunch-crunch of snow underfoot.
You look around everything appears clean and pretty. Even the broken down house on the corner looks better, the garbage in the yard hidden away by the cover of a dreamy blanket.
If you live in B.C., it rains the next day and all the crud comes back up to the surface and looks twice as bad as it did before. Maybe the rain made it dirty, or maybe on some level you feel betrayed by the sudden and uncontrollable image shift.
Either way it is just snow and a dirty yard. If my mom were out walking, which is pretty unlikely as she hates the cold, she'd just see snow and hate it for what it is. That's because she likes the hot South African sun and can't relate to our Canadian winters.
But, it is all perspective. Especially in the current real estate and rental market.
That brings me back round to that broken down house. If you want to sell it or rent it, you need to make it warm and inviting. Tidy it up until it shines and find a way to add value to it - for both the prospective tenant or buyer. There are a lot of listings on the market now and tenants have a pick of the best and challenge landlords to lower the rents - which many feel forced to do.
When you look at that same paint peeling, rotten fenced, broken windowed home from an investors perspective - you can see opportunity. An opportunity to help a seller, and possibly a tenant, find a place to live in once you have done the needed repairs to turn that house into a home.
I guess I answered my own question. Snow can make a dirty house clean and you can make a crappy house a home with the right attitude and ability to see what can be instead of what sometimes is.
Now, if I could only find a way to make my mom think snow is great....
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We provide a low cost, efficient service to ensure payment of rental arrears and/or eviction of problem tenants.
One stop shopping - from the preparation and service of a Demand Letter to the enforcement of a Writ of Possession we handle the entire transaction.
If the future of our economy is depending on natural resources then the future is depending on Alberta oilsands. Boom or bust they are here to stay. With 400 years of oil reserves until we start making cars that run on water the world is looking to Alberta to produce Food Fuel and Fertilizer.
"Feel it? Suddenly, there's a buzz in the air. Alberta's big, bad oilsands are back in vogue.
Oh, don't get too excited -- or aggravated, depending on how you feel about North America's biggest, messiest industrial project.
The oilsands boom isn't coming back anytime soon. At least, not in its original, chaotic form.
No one is predicting a sudden gusher of overlapping, poorly planned megaprojects, a brand new influx of tens of thousands of foreign temporary workers, or a rapid rebound to $147-US-a-barrel oil prices.
In fact, another spike in prices(however unlikely) is the last thing anyone wants. That includes OPEC, which sees the current $75 to $80 price range as pretty close to optimal."
"Alberta will be right in the middle of it, but we have to do something about productivity."
But Alberta is still in a better economic positiion due to it's lower projected deficit and $17 billion in a sustainability fund
Alberta housing market stilll affordable but costs are rising: RBC Economics -"Although home affordability has deteriorated, it still compares favourably to long-term averages," said
of the benchmark detached bungalow moved up to 34.4 per cent, the standard townhouse to 25.9 per cent, the standard condo to 22.4 per cent and the standard two-storey home to 37.9 per cent.
"The market recovery has been less pronounced in Alberta than in other regions of
In fact 35% affordability is very good other places, like B.C have seen figures in the 70% range.
Oilsands players hiring again but the economy isn't quite back in the game - "But while the new jobs indicate that activity in the oilsands is picking up, Sumner said he expects Alberta's labour market to remain volatile.
"It solidifies the fact that we know in the long run, these are viable projects and they're going to create a lot of jobs," he said.
"Does this mean that it's a sign the broader economy is turning around? I'm not sure you can quite say that."
Alberta's unemployment rate had jumped by 0.4% to 7.5% in October, an increase that had surprised many observers"
All eyes are looking to 2010 to be the year the economy rebounds, even with an unemployment rate of 7.5% Alberta was better off then most of Canada.
The city's population stands at 782,439 people as of April 2009; while Edmonton’s metropolitan population is more than a million people.
This is very similar to 2002 and around the Kyoto Accord time when the market was full of fear and FULL of deals. Although I think we're a ways off from a full recovery, you can clearly see the strength and backbone to Alberta's economy.
Managing your current investments and and adding new ones at this time, will have you smiling in 2012 onwards as the economy begins to shine again.
What does oil have to do with real estate?
Imagine if your investment property was near the next big oil reserve, workers from around the world were going there to live and work for the next few decades. Tenants were willing to pay top rents because the economy was booming and they were making oil dollars.
Alberta is that place, with vast oil sands that hold a proven 175 billion barrels of recoverable oil, second only to Saudi Arabia. The most impressive part is that Alberta has only just begun; experts say oil sands production can be sustained for at least 400 years.
"These are ambitious projects, very big projects, and thus very expensive," he said in a telephone interview from Calgary, Alberta -- Canada's oil capital.
"It's clear that cost is a problem," he conceded. "But it's also an important deposit -- several billion barrels of oil in the ground -- while more conventional sources of oil that would be relatively easier to extract are either drying up or are inaccessible to international firms such as Total."
"The price of energy is not going to collapse," despite downward pressure from a spiralling global economy, Gires predicts.
"To justify our massive investments in the oil sands, we're looking at what the world will look like in 2020, 2025 or 2030," he said.
"In the long run, despite all of the efforts to boost energy efficiency and develop alternative energy sources, the planet's appetite for energy ... will mean additional oil production will be welcomed and we'll find buyers for our output."
Think of the long-term, not an economy that in coming out of a recession but as the world starts to recover and the demand for oil increases - rents, property values will again increase. Maybe not like 2007 in Alberta but steady consistent growth that makes investors happy.
Wherever your real estate investment is located—provided you bought it at the right price and terms—there are many ways to keep your property profitable. If you analyze your real estate, update and improve your investment team, review your long- and short-term investment plans and stay focused on the end result; your real estate portfolio will be a rock solid fortress that can weather any storm.
Analyze
The first and most important thing is to carefully analyze your portfolio.
If you don’t know the hard numbers on your properties, then you are risking everything that you have worked for. Keep your budgets in line and carefully evaluate every purchase and renovation. Once you have a better idea of where you stand, you can start to recession-proof your properties. First, your customers are your tenants, so learn how to keep them happy and decrease vacancies. For example:
Increase your revenue by adding rental units to your properties or other moneymaking add-ons like renting garages separately, extra parking spaces or coin-op laundry facilities. You can also refinance your mortgages with longer amortizations, increase rents where reasonable or rent your properties furnished.
Evolve and involve your team
Streamline your team. I don’t mean fire everybody and do it all yourself, but rather make your team out of the best players available in your area. Once you have the all-star team, get their input and advice, use their knowledge and experience to protect and improve your assets and your position in the market. Accountants can help you lower your taxes, lawyers can protect your assets, bookkeepers keep you aware of money liquidity and property management can up the cash output of your investment property.
Be aware
Be aware of longer-term trends and statistics. Don’t get caught up in the moment—especially when making decisions. There are both positive and the negative things that are happening in headlines. Take both sides into account and be realistic as you evaluate what’s really going on. Review your business plan both short-term and the long-term and adjust it as necessary. Don’t knee-jerk react, but also don’t drift back and forth without any solid goal in site. Have multiple investment strategies all with a clear exit in place.
This is not the first economic downturn the world has seen nor will it be the last. What is important is to mind your business and your properties to make them profitable no matter what comes your way.
"Here is a nice simple explanation of how fixed mortgage rates are tied to bond rates – and how to predict when they might be headed up or down.
Canadian 5 yr bond yields -.03bps to 2.73. The spread, based on the MERIX 5 yr rate published of 4.34% is 1.61. Just as a reminder, the floor and ceiling rates suggest the “comfort zone” (currently between 1.35% and 1.55%) where lenders want the spread to be.
If the “Rate Barometer” (which is the spread between the fixed 5 year rate and the 5 year bond yield) stays within the floor and ceiling range, then you likely won’t see a rate change. If the spread, dips below the floor for extended periods (over a week), then expect a rate hike.
And likewise, if the spread remains above the ceiling rate, expect a rate drop in the near future.
The yield, rate of return on your bond, can be read through a yield curve, which is the pattern of yields on bonds. This increase in bond yield is something to watch.
If the bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise. Ideally lenders are looking for a spread between 1.35 and 1.55."
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