I am a recent Quickstart attendee and new REIN member. Having an interest in personal finances, I have a subscription to Moneysense magazine and was intrigued when it showed up in the mailbox yesterday with the cover headline: "A Boom Of Your Own" and stories about "The New Way to Make Money In Real Estate" and "Where To Buy Now". I thought it should be interesting in respect to what I`ve learned recently. Well, it wasn`t.
The Editor`s Note was a smug piece down on Canadian real estate basically because it has risen dramatically since 2000 for no obvious (to him) reason. I wonder how hard he researched. As well, the editor refers to "news stories from the U.S., Great Britain, Spain or Australia about sliding real estate prices." After complaining about not knowing why prices have risen, he now doesn`t explain why he thinks they will decline other than the anecdotal fact they have declined elsewhere. He also refers to the fact that rental prices have not increased the same amount as home prices but that doesn`t seem like an apt comparison to me for a number of reasons. The first is the vast size of Canada could throw the numbers out of whack as well as different growth patterns in different regions. Second, what if the costs to rent property has decreased in the last while? We all know which way interest rates have been going. And in respect to interest rates, what about the size of the home-owner market – has there been a "migration" to home-ownership that would affect rental rates? There is no mention of these details, just a know-it-all attitude that seemed to be hoping for a sharp decline in prices to prove a point some time in the future.
The "New Way To Make Money" article is so simplistic it is hard to convey – you can`t count on double digit increases in value anymore so buy properties with positive cash flow and verify the numbers before you buy. Well, duh. What is "new" about this line of thinking? Worse, was the "Where To Buy Now" article. The story basically rated Canada`s top 35 cities according to Value (a comparison of rents to average home price), Momentum (sales in comparison to listings) and Economy (growth between 01 and 06). The top 20% (seven cities I guess – 20% of 35) get an A and B`s and C`s seem to be handed out subjectively. From there, the grades are amalgamated evenly for an overall score. I won`t even begin to go into how poorly this system stacks up against REIN`s 12 Economic Fundamentals but instead point out the results of the Moneysense list. Regina comes in at #1 followed by Saskatoon and Winnipeg. REIN Ontario Top Ten town #2, Barrie, comes in fourth in all of Canada tied with Sudbury! Top Alberta town Edmonton comes in at nine tied with Guelph but behind Fredricton and Moncton.
This issue came with a renewal notice, which, needless to say, I will not be filling out. Looking behind the curtain I see an editor trying to fill space. Thankfully I have REIN research and systems to guide me but I get chills thinking about people basing their investment decisions on these types of shoddy studies.
The Editor`s Note was a smug piece down on Canadian real estate basically because it has risen dramatically since 2000 for no obvious (to him) reason. I wonder how hard he researched. As well, the editor refers to "news stories from the U.S., Great Britain, Spain or Australia about sliding real estate prices." After complaining about not knowing why prices have risen, he now doesn`t explain why he thinks they will decline other than the anecdotal fact they have declined elsewhere. He also refers to the fact that rental prices have not increased the same amount as home prices but that doesn`t seem like an apt comparison to me for a number of reasons. The first is the vast size of Canada could throw the numbers out of whack as well as different growth patterns in different regions. Second, what if the costs to rent property has decreased in the last while? We all know which way interest rates have been going. And in respect to interest rates, what about the size of the home-owner market – has there been a "migration" to home-ownership that would affect rental rates? There is no mention of these details, just a know-it-all attitude that seemed to be hoping for a sharp decline in prices to prove a point some time in the future.
The "New Way To Make Money" article is so simplistic it is hard to convey – you can`t count on double digit increases in value anymore so buy properties with positive cash flow and verify the numbers before you buy. Well, duh. What is "new" about this line of thinking? Worse, was the "Where To Buy Now" article. The story basically rated Canada`s top 35 cities according to Value (a comparison of rents to average home price), Momentum (sales in comparison to listings) and Economy (growth between 01 and 06). The top 20% (seven cities I guess – 20% of 35) get an A and B`s and C`s seem to be handed out subjectively. From there, the grades are amalgamated evenly for an overall score. I won`t even begin to go into how poorly this system stacks up against REIN`s 12 Economic Fundamentals but instead point out the results of the Moneysense list. Regina comes in at #1 followed by Saskatoon and Winnipeg. REIN Ontario Top Ten town #2, Barrie, comes in fourth in all of Canada tied with Sudbury! Top Alberta town Edmonton comes in at nine tied with Guelph but behind Fredricton and Moncton.
This issue came with a renewal notice, which, needless to say, I will not be filling out. Looking behind the curtain I see an editor trying to fill space. Thankfully I have REIN research and systems to guide me but I get chills thinking about people basing their investment decisions on these types of shoddy studies.
