This past weekend my wife and I were watching TV when an old episode of A&E’s, “Flip This House” the popular real estate investing and flipping show from 5 years ago came on so we decided to watch it for a little bit. Now I must admit, back in 2005 even I was caugh up in the drama. I couldn’t beleive these people were making so much money by buying a home, doing half assed renovations on it with a Home Depot line of credit and then selling it for a $50,000 profit for 1 month of work. I remember being baffled watching a 400lb man renovate a house when common sense tells me he would have a heart attack if he spent even 1 day working on a real construction site. I remember thinking, “if they can do this I sure as heck can do it, and even better.”
Fast forward 7 years and we all know how the story went down south and as it turns out, most of these people didn’t do quite as well at the real estate game as the TV show made it look. So here were are in the summer of 2012, the real estate market in the US is showing a small heartbeat, prices growth is cautiosly optomistic and the SHOWS are back! Get rich quick- who cares if you know what you are doing!
From all of my experience I guess I’ve learned one thing- there will always be someone ready to take your money with the promise of miracles, instant riches and the shortcut to wealth mindset. If you take one thing away from this article, here it is- there are no miracles in real estate investing. Yes people make money and do very well, but they started small, they made good choices, got proper advice and viewed real estate as a long term strategy, not a quick fix.
Closer to home in Canada the story over the past 5 years is different. While real estate markets tanked around the world the Canadian Real Estate Market held strong and grew very quickly and faster than average. Low interests rates and low inventory caused markets such as the real estate market in Mississauga to see double digit increases in a short time. Now I’m not here to make market predictions (that’s for another article) but I will say that I highly doubt we will see the kind of across the board appreciation we witnessed over the past 4 years. Regardless of this, I still see get rich quick schemes, investing on emotion instead of logic and people not taking the time to make smart choices. More now than ever, I beleive you need the best advice you can find, and experience to help in the real estate game.
Is it a good time to buy? It’s always a good time depending on your circumstances and what your long term goals are. Is it a good time to throw caution to the wind and rely on market appreciation to make your investment successful? Well, I’m not convinced about that one!
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