"The West Coast actor turned real estate guru says investors should concentrate more on what is happening in their backyard than what the mainstream media has to bemoan about the property market.
The RE/MAX agent says when he purchased his first property in Vancouver in 2000, the media then was also giving buyer pause for thought."
“Based on the media reports then, I was convinced I bought it for too much,” he says. “The same is happening now with all of the negative press with people unsure whether to buy or not.
“I do read all the news reports, but I concentrate more on what is happening in my own backyard and locality. You need to make your own decisions and not base decisions on general reports.”
I'm not supporting the source, just the comment... It's not a Canadian Real Estate market, it is a local market. We've said that for years.
You should rely on economic data, local data, your city's local politics and of course the property to tell you what is a good buy and what is not.
I'm from Vancouver and what the news (negative) is saying and what the market is telling me in certain target neighbourhoods is don't buy outside of my specific niche or don't buy at all.
There are good deals in bad markets and bad deals in good markets. Read More
Showing posts with label how not to invest in real estate. Show all posts
Showing posts with label how not to invest in real estate. Show all posts
Thursday, August 08, 2013
Friday, August 07, 2009
Wade Graham's 5 ways to lose $50k
This is from Wade Graham's newsletter posted on the REIN forum.
The Top 5 Real Estate Investment Mistakes
I am not one to negotiate hard for a rock bottom price as there are definitely other considerations in every transaction but unless your rent covers ALL of you costs and makes you money each month you have paid too much. Personally my cut off is $500. If I can't make that much each month on the investment I don't invest.
2. Inspections are for rookies! You have done a few renos and owned a couple of houses. You don't need to pay someone $500 to tell you that this house is in great shape! I have looked at a lot of homes and many of them I thought were in good shape until the inspector came through. My last inspection saved me and my investor roughly $65,000! Was it worth the $500? Unless you have very large pockets (that you are willing to part with) or have extensive knowledge you need an inspection.
3. What is your exit strategy....How do you get out of the investment? Unless you have two very good exit strategies don't put a dime into Real Estate. Getting out isn't as easy or cheap as you think! What are all of my costs on exit? Real Estate fees, legal, renos, lost rent, mortgage pay out penalties and the big one (hopefully) taxes! When can I exit? Do I need to wait five years or can I sell this contract to another investor tomorrow? Is refinancing an option? You need to have clear answers to all of these questions or your investment may not be everything you hoped!
4. Who is going to rent my property? Most investments forecast a future value but the problem is that you need to get to the future to get that value. This is where the true asset comes in.....that is right....your tenant!
"A tenant is...a partner in business who will open up the shop each morning and lock it up at night. They will look after security and inform you of potential problems in the business. They will cut the grass, rake the leaves, shovel the snow, pay all the utilities. They will even pay all your mortgage payments and taxes. Then, in the end, they will relinquish all monetary interest in the business and walk away, leaving you with the profits." ~Tim Johnson
So at the end of the day who is it that is willing to pay the rent you need to get to the future!
5. After I buy the property I don't need to do anything right? Well, as great as that sounds the fun part is now over and reality is about to set in. For those that think that you just collect a cheque at the end of each month, I have some news for you. Not a day goes by that I am not dealing with one of our investments. Most of the things are positive but not all of them. Even if you have just one investment property you had better have some expertise in the following: Property Management, Repairs and Maintenance, Accounting, and Legal. These are things that will come up regularly and they don't care if you have a job or are sleeping or are on vacation.
The Top 5 Real Estate Investment Mistakes
How to lose $50K in no particular order
1. You pay too much for the property. This one sounds obvious but 9 times out of 10 this is the one that catches most people. You get excited about the property and forget that this is a numbers game and not a paint colour game. Your agent is focused on making a deal happen so he forgets this is about dollars and not the carpet stain. All of your friends are making big cash (or so you think) and you want in! Who cares about the rent or who is going to pay it! Values go up and that is all you need to know........right?!?I am not one to negotiate hard for a rock bottom price as there are definitely other considerations in every transaction but unless your rent covers ALL of you costs and makes you money each month you have paid too much. Personally my cut off is $500. If I can't make that much each month on the investment I don't invest.
2. Inspections are for rookies! You have done a few renos and owned a couple of houses. You don't need to pay someone $500 to tell you that this house is in great shape! I have looked at a lot of homes and many of them I thought were in good shape until the inspector came through. My last inspection saved me and my investor roughly $65,000! Was it worth the $500? Unless you have very large pockets (that you are willing to part with) or have extensive knowledge you need an inspection.
3. What is your exit strategy....How do you get out of the investment? Unless you have two very good exit strategies don't put a dime into Real Estate. Getting out isn't as easy or cheap as you think! What are all of my costs on exit? Real Estate fees, legal, renos, lost rent, mortgage pay out penalties and the big one (hopefully) taxes! When can I exit? Do I need to wait five years or can I sell this contract to another investor tomorrow? Is refinancing an option? You need to have clear answers to all of these questions or your investment may not be everything you hoped!
4. Who is going to rent my property? Most investments forecast a future value but the problem is that you need to get to the future to get that value. This is where the true asset comes in.....that is right....your tenant!
"A tenant is...a partner in business who will open up the shop each morning and lock it up at night. They will look after security and inform you of potential problems in the business. They will cut the grass, rake the leaves, shovel the snow, pay all the utilities. They will even pay all your mortgage payments and taxes. Then, in the end, they will relinquish all monetary interest in the business and walk away, leaving you with the profits." ~Tim Johnson
So at the end of the day who is it that is willing to pay the rent you need to get to the future!
5. After I buy the property I don't need to do anything right? Well, as great as that sounds the fun part is now over and reality is about to set in. For those that think that you just collect a cheque at the end of each month, I have some news for you. Not a day goes by that I am not dealing with one of our investments. Most of the things are positive but not all of them. Even if you have just one investment property you had better have some expertise in the following: Property Management, Repairs and Maintenance, Accounting, and Legal. These are things that will come up regularly and they don't care if you have a job or are sleeping or are on vacation.
Thursday, May 14, 2009
Is a little knowledge dangerous?
My husband forwarded House Miners to me today. The information from three simple drop down menus is analyzed to help you decide whether or not to sell or buy a house now.
The parameters are:
1. Where is it? - Country, Province/State, City
2. I'm thinking about -buying or selling
3. How much is....?- the house price and if applicable the monthly rent
4. Hit Analyze and you're done.
After "careful" analysis the site will advise you whether to sell or buy.
Is it really that easy? Do people honestly make large financial decisions based on a website that couldn't possibly have even the slightest idea of well... anything?
Perhaps I'll call the psychic line and ask if I should get a divorce or maybe I'll throw the dice and have that many children.
I think you get the point.
The parameters are:
1. Where is it? - Country, Province/State, City
2. I'm thinking about -buying or selling
3. How much is....?- the house price and if applicable the monthly rent
4. Hit Analyze and you're done.
After "careful" analysis the site will advise you whether to sell or buy.
Is it really that easy? Do people honestly make large financial decisions based on a website that couldn't possibly have even the slightest idea of well... anything?
Perhaps I'll call the psychic line and ask if I should get a divorce or maybe I'll throw the dice and have that many children.
I think you get the point.
Monday, December 15, 2008
A $475,000 Dog House
No, it's not an extra two zero mistake. The pooch palace will shelter a pair of Great Danes belonging to a surgeon in London, whose own luxurious house is to be constructed nearby.
"The three-room dog house (two bedrooms and a lounge) will be outfitted with temperature-controlled sheepskin beds, a spa, an expensive hi-fi system, and a 52-inch plasma television set.
Picture courtesy of The Globe and Mail
A retina scan at the entrance will enable the owner to keep out dogs who might try to pay unauthorized visits to the Great Danes. Closed-circuit TV cameras will provide the owner with round-the-clock surveillance of the dogs' comings and goings between their house and their adventure playground."
A retina scan? Too weird. Read the full article here
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