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Perspective | What to consider before investing in the real estate market – The Washington Post

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3 years ago

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Investing in real estate — specifically, buying a property with the hope that it can be sold later at a profit — has a strong appeal for lots of investors. It seems like an understandable, accessible investment and a great way to turn a profit at a time when property values are rising dramatically. However, even with prices skyrocketing, real estate is an investment with risk.

Here are a few things to consider before you make a real estate investment:

Is now the right time?

Ultimately, investing in individual properties is a speculative endeavor — a kind of high-risk investment that can result in outsized gains, or catastrophic losses. And while there are smart ways to make these investments, this is an incredibly risky time to be entering an already risky investment.

It’s no secret that the housing market is hot right now. It’s overheated, in fact. Recent data shows that home prices are setting records, particularly in highly populated areas like Washington, and inventories of available homes are at rock-bottom levels. It can be difficult to find a primary residence to own, much less to make an investment in.

While low interest rates have fueled a lot of this demand, they’ve also generated a lot of competition. Real estate investors are not only competing with everyday home buyers, but also corporate investors with deep pockets. With so many dollars chasing so few properties, you’ll probably pay a premium price, which dramatically curtails your potential profit margin. If the economy takes a downturn or interest rates rise, the property could depreciate for reasons entirely out of your control.

That’s to say nothing of the usual risks and costs in real estate investing. Property maintenance is expensive, and tenants can be unruly. Taxes, insurance and laws pertaining to real estate can be complex. Any investor seeking a healthy profit margin will need to prepare for these potential challenges.

Know the trends

If you’re considering an investment in real estate, now or in the future, it pays to have a good understanding of the trends that drive real estate values. For example:

· Prices: You should be aware of the historical pricing trends for any property or location. Are they increasing, or are they depressed?

· Demand: Whom is buying in your location and is demand increasing?

· Comparative sales: Are sales of similar properties being made at a faster pace?

There are a few other questions that can help you gauge a property’s value, especially if you plan to purchase a rental property. Successful real estate investors are highly knowledgeable about these trends.

· Rental trends: How many rentals are nearby, and what are they renting for?

· Future development: Will there be changes in the building or location that could make future values rise or fall?

· Occupancy rates: Are building occupancy levels increasing or decreasing?

· Interest rates: What is the outlook for interest rates and their potential impact on demand?

Don’t risk what you can’t lose

Real estate investments typically involve large sums in single properties, and the risk of huge losses is significant. For that reason, real estate only works for investors who can tolerate the volatility — both financially and emotionally. They must understand the risks involved and, in turn, have positioned themselves to withstand the potential losses.

Perhaps even more importantly, real estate investors need to have the intestinal fortitude to look long-term and push through volatility. Keeping the right mind-set is key to not letting your emotions push you into poor investment decisions.

It may be easier said than done, but patience and planning are essential. Setting realistic expectations and managing them when it comes to the appreciation of your property can help you realize profits. Even when sales are moving quickly, don’t rush and find yourself in a bad investment.

David Mount is a director with the Wise Investor Group at Robert W. Baird & Co. in Reston, Va. Baird does not provide tax, legal or real estate advice, and does not provide or service mortgages.

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Homelessness: Tiny home village to open next week in Halifax suburb

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5 days ago

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October 24, 2024

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

The Canadian Press. All rights reserved.

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Here are some facts about British Columbia’s housing market

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2 weeks ago

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October 17, 2024

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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B.C. voters face atmospheric river with heavy rain, high winds on election day

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2 weeks ago

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October 17, 2024

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VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.

Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.

The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.

Wednesday was the last day for advance voting, which started on Oct. 10.

More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.

Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.

An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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