It might be hard to imagine for anyone younger than, say, 45, but there was a time not long ago in which real estate was not the in vogue hot ticket item it is today. Some of us remember those days well. New listings of homes languished on the market for months on end with little in the way of interested buyer activity. It is a time that some would have us believe is overdue for a return. But consider that the GTA absorbs roughly 100,000 new immigrants a year (1/3 of the Canadian total), and created accommodation for a fraction of that number, there is just as strong a case to be made that real estate values may continue to rise. Must continue to rise – for those who believe in the theory of supply and demand.
However predicting the future is a dangerous gambit and I wont pretend that I have been blessed with that gift. Hindsight however is a specialty of mine. At least so far as recognizing my errors, albeit 20 years later than the ideal moment.
In the mid nineties, an opportunity presented itself for the acquisition of a multi tenanted building in downtown Guelph. A partner and I made an offer, and eventually entered into an accepted agreement of purchase and sale for $540,000. As is often the case, our offer was conditional on several items, including financing and inspection. It was during this conditional period, that we came across some information that neighbouring properties may have contaminated soil. This news had cast enough of a cloud over our purchase, that we abandoned the deal.
For a short period of time, we may have considered ourselves fortunate – very short. With the benefit of hindsight, it is difficult to arrive at any conclusion other than – we goofed. The building remains today and continues to earn income – for someone else. The neighbouring properties continue to be contaminated. What has changed? The price. It is certainly not my intention to encourage the disregarding of the dangers of purchasing contaminated properties, or properties with any other defects for that matter. Rather, an observation using but one example, that folks with a higher tolerance for what I may have seen as a defect, are often rewarded for it.
Real Estate, assuming a reasonable amount of financial prudence upon acquisition, is better owned than not. Or as a farmer friend of mine likes to say, better lookin at it than for it’.
An easy trap to befall anyone cursed with a long memory, is to believe that because prices seem high compared to a couple decades ago, it must mean you have missed your opportunity. Thankfully, in this way, real estate is not unlike the planting of a tree. The best time was 20 years ago, the second best time is today.
Thanks for reading,