FWIW Kaswardy, we spent the past 30+ years building our net worth buying, selling, being landlords, buying residential and acreage lots and building and selling them. Basically that is how we've built our net worth preparing to retire. Both myself and our daughter (since she was 18) are licensed realtors ourselves. We hear realtors on the radio promoting the market in Calgary areas as a great opportunity right now, but the question is are you willing to risk catching a falling knife? The reality is the majority of realtors are still feeling the market is desperately over valued when talking amongst themselves in offices! In fact right now, we are struggling (over 90 days on the market) to sell our own last condo revenue (bought in panic in a heated market = huge mistake), listed at $30K less than we paid for it when negotiated in 2006 and delivered upon build in July 2008 (after the wheels fell off the bus so to speak). Only for sale now due to a tenant breaking contracts back in November, and our softness of not selling it last May when they begged a renewal when their contract came up after a year prior, when if we'd sold we'd have at least broke even from 9 years prior purchase.
Single family homes in the older districts (1960's) under $500K especially if opportunity to rent out basement (income helper), provided they are listed competitively are still moving somewhat, as are single family two storeys around that 1200-1400q ft range in the newer edge communities if priced typically under $400K. However in Calgary area we really only saw the softening occurring in the fall last year of any significance. Over the $700K range I am hearing a ton of folks saying it's dire, exception generally being in the belt line area. We can tell from our front page system, the number of new listings versus pending sales and actual solds updated daily as well how many have expired/terminated = unsold.
Truly not trying to discourage you from doing as you see fit, just sharing what we are hands on, feet on the ground experiencing right now, unlike the reports you read that are weeks lagging typically. In addition hubby and I bought a water lot in Florida at a huge deep discount in the crash of 2009, and yes it is worth considerably more now than we paid to buy and build on, however ............ If we knew then what we know now as they say. Because we can't claim homesteaders being foreign ownership, we pay over 3 times what our neighbours do in property taxes and that cost alone has risen to almost 5 figures per annum. Last year the flood insurance body announced we would be paying a huge premium being non-resident owners on our flood insurance moving forwards to help them get back some of the claims they've paid out a few years ago. When we sell, there is the issue of with-holding tax, as well you are playing with the exchange rates in addition for timing your buy/sell times not just the market timing. We are actually in the process right now of trying to sell that also, and whilst we appreciate different states have different rules, it has put us totally off ever owning any real estate as a foreigner in the USA again.
Of course we are prepping at an age for soon to be retirement, and whilst we have no intention of personally owning real estate again in the future after all sells here, I still feel strongly that long term as long as you consider the market sentiment you are buying in, long term holding of real estate in a well researched economic centre can be a great part of your overall investment portfolio. Albeit we did feel drained dealing with tenants at times, but would concur with others here that it is for sure best to be hands on with your first revenue.
To keep things in perspective, they are saying that in the USA only 1 in 100 folks are employed in the Oil/Gas industry, and on BNN today they were pointing out the positives in that regards to having low priced oil, but with Alberta being so energy dominant it's quite a different story we are on the ground evidencing. Moving companies are stating for every 13 moves back east/maritimes they are lucky to get 1 return trip back west and even then sometimes it's bypassing Alberta onwards to Vancouver. This oil situation is having a ripple effect on so many other businesses - hair dressers and chiropractors telling us their businesses are down exponentially, some mentioning 45% and more to us in every day travels. Every week I am speaking with IT professionals, executive secretaries/assistants and others that have been laid off, some since August last year, some having set up child care or driving student buses now unable to find alternative suitable employment. Overheard large home builders staff at a Christmas Party talking outside as we arrived saying their home starts were down over 50% last year versus 2014, and someone with a business next to one of their storage yards concurred at a house party that all their vans hardly moved compared to in the past the yard would be empty by 7.30am most mornings.
I'm sorry this is a little long winded but you have done so well to build up good equity into your recent sale, I'd just hate to see anyone's efforts thus far be wiped out with a wrong move, at the wrong time. One thing about opinions is everybody has them and they are very different, and as much as I hate to admit it, I actually think for once Kevin O'Leary may be right about Canada overall being too much in a real estate bubble in large centres of Ontario and Vancouver. Also his take on Alberta may take many years to recover from the current oil situation stance, that definitely concerns me. Who really knows, but as the saying goes, there's little smoke without fire usually and crystal balls are the fuzziest I've ever known in over 20+ years living working and building in this province. I distinctly recall selling homes here in 1995 for less than folks had paid for them in 1993 also for what it's worth, as well being in 27 car line ups to present offers in 2006 and seeing one home selling for double it's list price. To then watch it taper off end of first quarter 2007, taking until end 2007 for the sellers to believe us that the market had turned, and kept going down for about the next 3 or 4 years before turning slowly back up again. For some that bought right at the peak of the market (especially condos), they were only just about breaking even in 2014, and now they are lagging again from that time frame a decade ago.
Another consideration is whether one should pay their landlord's mortgage or their own especially with current interest rate levels being so low? Of course if Miss' is in a bubble that's about to burst or could it push higher????? then it needs to be seriously considered how long a time frame one would be committing to. I recall back in 2004 at a realtor function a fellow realtor saying to another who had just bought in the new build London "don't you feel the market is too high priced right now?", she retorted back to him "darling in a couple of years this will seem like chump change". She was right, but after 4 years, he was right = go figure, there's never ever an easy answer when it comes to any form of investments, except when decades of time is on our side.
All in all Kaswardy, just remember whilst it doesn't give much return, sometimes when there's so much economic uncertainty at play in so many areas throughout not just a province, country, but the world of late, it pays to sit on our hands and sometimes stay on the side lines in cash equivalents, until we see the confirmed curl in the desired direction occurring. None of us ever consistently buy at the lowest and sell at the highest in anything we trade in, but if we can get the bulk of the range in-between we typically end up way ahead overall in the big picture.
Sincere good luck with whatever you decide to do, and be sure to let us know.
