Is Canada’s Real Estate Market In Trouble?

real estate investingCanada is a big country. One of the things I have always said when looking at purchasing real estate is to pick your area and pick it for the right reasons. Do I believe there are areas in Canada that are prone to issues or that I might personally have issues with? Absolutely.

Not everywhere in the country is going to offer lukewarm investment opportunities, even during a recession – you just have to dig a little deeper to find them.

There are certainly areas of concern for real estate investing within Canada but everyone has their own reasons for exactly why there is some concern. Practically, I believe there are many more opportunities for real estate in Canada than there are problems.

If you do your research and find out what your hot buttons are, you can find a good opportunity worth taking. Canada is a very large and very diverse country with many different markets.

I really want to invest in Kelowna right now but the numbers simply do not allow me to based on the parameters I set for myself when real estate investing. The key is looking at the individual communities.

Some of the issues or concerns that you should take into consideration:

  • Rate of return – Consider how much you want to make off your investment before you commit. The profit difference on a buy & hold versus flipping can vary significantly so it’s important to know what you want out of the deal.
  • Economic landscape of the area – To give you an example, real estate investors are talking about Nova Scotia and Halifax right now because of a large government contract that will provide long-term, stable employment for many years to come. A few years ago people were reluctant to invest in Halifax because of the lack of employment but now it’s the opposite.
  • When things go sideways – Consider what your contingency plan would be if things don’t go as you planned. Are you willing to move into your investment property if it comes down to it? Are you willing or able to sell at a loss or absorbs the negative cash flows if things change?  Think about your options in advance.

I do not believe Canadian real estate investing is in trouble as a whole, but today’s investor certainly has to be more discerning with their decisions. Always detach any emotion from the decision making process, especially during recessionary periods.  Investing where you live only makes sense if the investment makes financial sense. You will be the one who pays for it and mistakes in real estate investing are never cheap!

 

 

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