National home sales activity held steady in July 2011 demonstrating continued homebuyer confidence.
According to Gary Morse, president of The Canadian Real Estate Association, recent statistics combined with other economic factors could mean now is the perfect time to get involved in the housing market.
“Mortgage interest rates are low and keeping home affordability within reach, making it an excellent time for buyers to take advantage of very favourable financing. Prices and affordability evolve differently among local markets, so buyers and sellers should consult their local Realtor to better understand how the outlook for housing supply, demand, and prices is shaping up in their housing market.”
While statistics help paint of picture of the market, Real Estate Investment Network president Don Campbell cautions investors to focus on the underlying economic fundamentals – particularly those in their target region’s real estate market.
According to Campbell, the ‘Canadian real estate market’ does not actually exist.
“Canada is actually a series of regional market, all of which perform relatively exclusive of each other,” he wrote in Home and Garden Magazine.
“In 2011, the market really will be a Goldilocks story: some markets will be too hot (compared to underlying economics), others will be too cold, and some will perform just right. As our regions continue to detach from each other economically, this trend will continue for many years to come and will compel investors and homeowners to ignore national real estate numbers and trends.”
According to Campbell, long-term increasing prices of real estate stem from economic (GDP) growth, job growth and population growth numbers.
Tips for first time real estate investors:
You’ve got to put in the legwork and research your target investment market. In addition to looking at the underlying economic fundamentals, look for areas with desirable local amenities and future development plans.
Check your finances
Don’t waste time looking for the perfect investment property before you speak with your bank or mortgage broker. Make sure your finances are in order before you start haunting real estate websites and viewing potential properties.
Put yourself in tenant’s shoes
Think about the type of tenant you’d like to rent to and what amenities would most appeal to them. For instance, if you’re looking for students, then you’ll want to invest in a property close to a university and public transport. Young families, on the other hand, will be more attracted to properties close to schools, playgrounds and shopping centres. Other amenities to look for include: leisure facilities, hospitals, waterfront, cafes and restaurants.
There are several different investment strategies to consider, but two broad categories are to long-term investment, or flipping. Prior to making your purchase you’ll need to identify your goals and what kind of commitment you want to have. Flipping could involve renovation which takes some expertise and money, while holding onto a property as a long-term investment means you’ll need to do some research into areas which represent good long-term value increases.
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