Archives for May 2015

Real Estate Is like Dandelions

DANDELIONS like real estate calgaryI was walking in the park the other day as we are having an amazing spring this year here in Calgary, which is quite frankly a rare site! Normally I don’t consider even booking my summer tire swap until just about the beginning of June due to the threat of a huge snowfall! As I was walking in the park I was just thinking how amazing the dandelion plant is, how even before the grass has had its first thought of turning green there are thousands of of these plants that have grown, polinated (with what insects and how I will never know) and seeded – truly amazing! This make me think a lot about how these plants are similar to real estate investing in both Calgary and abroad.  There has been an economic shake up in Alberta as well as a new majority government put into power, but guess what? The dandelions don’t care about any of that; here they are to welcome in spring before there are leaves on any of the trees. Real estate investing is very similar in that the houses don’t really care what political climate or economic climate that the rest of society is currently in.  There are of course different strategies that will work best in each of those climates, but at the end of the day a house is a house and if you buy on the fundamentals then what it happens to be worth on the market does not matter one little bit. Similar to the dandelions real estate in term of passive income is a lot like the seeds you see flying all over the place in the spring, if you planted 1 dandelion on your back yard you better believe you will have 10 more the next year – buying passive income properties will give you the cash flow for years to come and eventually (not as fast as the dandelions to be sure) you can leverage that house to be able to buy more (plant another real estate seed) if you structure things properly.  Real estate is also a patience game, a lot like gardening or the forestry business – you need to think long term and be able to set up your cash flow to be able to weather the economic storms that will come and go over a 10-15 year period.  Those that are currently buying up properties on the expectation that they will make money on appreciation only will be unpleasantly surprised when the market tides change.  Enjoy the weather here in Cowtown or wherever else you happen to be in Alberta this spring the outlook for real estate is looking especially bright in our opinion, much like the forests little yellow plants on all the medians all the parks around this city!


To you success!

Tim R

Luxury Real Estate Toronto UP and Calgary Down


There are always some anomalies in real estate markets in all areas of Canada, and right now Toronto is one of those things that just doesn’t belong in a world based on the fundamentals.  According to Christy’s international sales of luxury real estate in this city rose by around 37% last year.  How does that make sense in a province that is supposed to be a “have not ” area of the country at this time? This does show that there are always places in this country and others that do not follow the rules – and also that those people successful enough to own a multi-million dollar home generally stay that way in all economic climates and many of those hard working people did so with real estate.  Toronto happened to beat out a lot of other “sexy” markets such as miami, san francisco, LA, london, and new york in luxury sales last year, not something you normally see – which is great for the realtors in that area.  They also did not have to work very hard for it seeing average days to sale averaging only 1 month which is about 1/5 the normal amount of time to sell a luxury property.  In contrast to this Calgary and other areas of Alberta were hit very hard due to the downturn in the oil and gas sector over the last few months.  The exorbitant prices that we saw in 2014 have swiftly crashed down to earth, and the high end real estate always gets pummeled first when the high ticket execs get moved back to the US where they originally came from after all the projects dry up and engineers and middle managers are scrambling for work.  These employees were not often here in Calgary to stay so they are downsizing, moving back home, or panicking now that they can’t make the payments on their homes/cars they bought when times were booming here in Calgary.  This trend is normal when times get tough, the luxury end tanks first, then you see the high end drop second, then a slow third you will see the prices of mid and lower priced homes start to slide.  Calgary is not new to the boom and bust cycles in real estate, this happens roughly every 10 years or so on average and real estate investors that can see the signs/opportunities in every part of the real estate cycle are gearing up to reap some huge profits when prices start to drop and sales become harder to come by with less buyers in the market.  The winds are changing in Calgary real estate, and I for one have an eye out for the deals that are quick upon the real estate horizon!


To your success!

Tim R