Selling or buying a home in Alberta has gotten a lot more difficult as the Alberta Real Estate Association (AREA) announced earlier this week that open houses are now banned.
The decision to ban all open houses was made in response to the COVID-19 pandemic, AREA chair Kristie Kruger said in a news release.
“This unprecedented health pandemic has forced all Albertans to make significant changes. Because open houses are public, with unpredictable attendance, it is difficult to ensure they comply with Alberta Health recommendations,” Kruger said.
AREA chief executive officer Brad Mitchell told Global News on Thursday the group is recommending all realtors practice physical distancing when possible, including the use of video-conferencing where possible, virtual tours and digital signatures.
“[It’s a] tough time for our members. There’s the double whammy of the oil price war… as well as COVID-19. It will be tough here in Alberta but we’re looking forward to coming out of this strong,” Mitchell said.
Before the COVID-19 pandemic, Calgary realtor Zee Zebian said he would do open house showings every Saturday.
Zebian said he recently had to move to a virtual showing, offering up creative solutions to showcase homes to buyers and sellers via Facebook live.
He said since the World Health Organization declared the novel coronavirus a pandemic, showings have dropped off.
“I think prevention is key. When we have a booking come in for a showing, we’re asking everyone if they’re in good health. Is the realtor in good health? [Are] there multiple people coming to the property that maybe shouldn’t be there necessarily?”
Hinshaw explains why Albertans need to take COVID-19 situation seriously
Zebian said he and other realtors now have hand sanitizer ins personalized showings and will wipe down door handles and other items people may have touched.
AREA represents more than 10,000 realtors across the province and 10 local real estate boards and associations.
© 2020 Global News, a division of Corus Entertainment Inc.
Forget Real Estate Investments, Buy REITs! – The Motley Fool Canada
With the stock market crashing and interest rates tumbling, now seems to be as good a time as any for real estate investments.
However, investing in real estate isn’t the only method of generating passive income — buying REITs is just as good, or better, depending on the investor.
Real estate investments
Of course, there’s no denying the earnings potential of a good real estate investment.
In theory, you simply front the down payment, charge more for rent than you pay for the mortgage, pocket the difference and eventually sell the house for much more than you bought it for.
However, there are a lot of finer details and things that can go wrong along the way.
For one, you have to be able to afford the down payment. Even if the housing market cools with a recession, a 20% down payment is still going to be at least $50,000-100,000 — depending on the area of course. This hurdle can take a lot of investors out of the running right away.
Now, even with the down payment covered, there can be a lot of issues surrounding renting the property out. Staging and showing the place, carrying out repairs, footing bills, property tax, and so on and so forth. These things simply eat away at your time and your bottom line.
So, in order to avoid these types of issues, REITs can be preferable to traditional real estate investments.
Advantages of a REIT
REITs generally don’t require a minimum investment, as they trade just like a stock. So, you needn’t worry about being able to put six figures down from the onset.
As well, when you buy into a REIT, you’re not going to be directly managing any property. You won’t be responsible for going out and fixing a busted fridge or finding a new tenant.
You simply invest your money with the REIT and they take care of all of that.
Disadvantages of a REIT
Obviously, you don’t have control over the properties the company chooses to buy. It’s therefore important to choose REITs that align with your investment philosophy from the beginning.
As well, you generally aren’t going to make a ton of money on your principal investment with a REIT. While the monthly income you can generate is quite substantial, REITs tend to just bounce around in price rather than outright grow over time.
So, come time to sell, you’ll more or less be getting your principal investment back, whereas someone making a real estate investment will generally sell for more than they bought for.
Choosing a REIT
Most of its real estate investments are in the retail space, with a small but growing portfolio of other properties.
While its main focus is not on residential, but rather retail property, Choice is still well positioned to succeed in the near term.
This is because its retail locations are anchored by Loblaw, Canada’s largest grocer. Thus, Choice’s income and stability should be secured as Loblaw should continue to perform well as a vital service provider for Canadians.
Currently, Choice is trading at $12.87 and yielding 5.75%. At that yield, an investment of $20,000 would generate $100 a month in passive income.
Real estate investment strategy
Before making a real estate investment, consider whether it’s the best action for your situation. Under some circumstances, investing in a REIT can be a far better option.
As far as REITs go, Choice is one of the most stable options for Canadians, as its anchored by its main tenant, grocery giant Loblaw.
Many investors fear market crashes. However, long-term investors should embrace this crash, because bear markets can potentially allow you to make millions. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
How Do Real Estate Valuation Metrics Work? – Baystreet.ca
For real estate investments, the metrics used to quantify how certain properties or portfolios/Real Estate Investment Trusts (REITs) are valued are different than the typical valuation metrics used on most conventional stocks on the TSX or S&P 500, for example.
This is because real estate has unique characteristics to that of operating businesses in the sense that real property tends to be long-term, bond-like physical assets with a “coupon”-like cash flow structure, most of which is paid out to shareholders (REITs tend to have payout ratios in the 90%+ range).
For REITs, assessing Net Operating Income (NOI) rather than earnings in the norm, with a REIT’s NOI representing rental/lease revenue less operating expenses.
A REIT’s cap rate is the yield an investor receives on a given property, and is equivalent to the NOI of a building dividend by the value of the building.
Lower cap rates mean higher building values, so comparing cap rates across REITs with similar geographical/property type mixes can tell an investor which portfolio of properties may be undervalued relative to each other.
Vacancy rates are another important metric to assess knowing how full a given portfolio of properties is, on average, relative to the overall market can tell an investor if said properties are well managed or not.
Invest wisely, my friends.
Real estate industry taking precautions during COVID-19
Jason Yochim, CEO of the SRA, holds a conference call with agents three times a week to share news, advice and protocols.
“With no more open houses, we’ve advised our agents on what we call essential sales activity,” he said in an interview. “For example, if I want to move to that bigger house I’ve always wanted, maybe now is not the time to do that.”
On the flip side, some people need to move. Life changes such as divorce, or settling an estate, or moving for employment purposes are considered essential housing transactions, Yochim noted.
“We’re guiding our members that way. We’re (also) encouraging them to utilize technology for showings, whether it’s Facebook live or virtual tour products.”
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