Future

Own Your Own Future

 

Since obtaining my license, I’ve found it really interesting to hear various perspectives on the residential market. It seems like everyone’s got an opinion. Everyone’s an expert. I’ve witnessed that as soon as people know you’re a Realtor, they can’t help but tell you how they feel, what they think and ask for you to justify their point of view. Sometimes, I agree and in other instances, after I have made efforts to coach and educate (with or without making any progress), I’ll simply smile and nod.

You get the idea.

Whether you’ve got skin in the game… or have decided to stay out of it, discussing real estate in a social setting feels akin to entering the ‘involuntary luge’ at the Olympics – it’s going downhill really fast, you’re barely in control and you get the feeling that something bad’s going to happen any second. Not to mention you didn’t want to participate in the first place… even if you ‘win’.

Full disclosure: I’m firmly entrenched in the pro-own camp – not because of any perceived enrichment I stand to gain as someone who can help get you there – but because real estate ownership has been the foundation upon which I’ve built my own wealth. I’m only preaching what I’ve practiced. Truly.

To illustrate this very position (i.e. to provide you with evidenced-based decision-making; not, decision-based evidence-making), I would like to provide you with a real-life example from my albeit nascent career in real estate.

 

A real-life case study

 

Recently, I’ve seen a someone in their mid-30s realize how precarious their living accommodations are despite having rented in the same place for years. What made the penny drop was an impromptu visit from the landlord where they mentioned they will likely be selling. Only problem was that, while rent has been artificially low (i.e. below market value) for so long, affordability to rent (or to buy) a like-property has decreased more quickly that their ability to save. While we’ve all heard of this trend, the reality is that those ‘stuck’ with advantageous rents can’t afford to move – because they won’t get like-for-like again (especially not once you take location into consideration). Sadly, whenever you rent, your future isn’t totally secure; a landlord may want to occupy the unit themselves – or move in a member of their immediate family. What if they need the tenant to vacate for purposes of a total renovation? Would the tenant, while invited to return, be able to afford the (substantially) higher rent? Maybe or maybe not. Regardless, it’s a risky gamble.

Back to the previous example for one final moment. They were told about a condo coming up for sale in the near future. Same neighbourhood. Approximately same sized living space. Very nice, newer, building and within their budget. They were invited to view the property and submit an offer to purchase the unit before it hit the market (THINK: What an opportunity! A bird in the hand is worth two in the bush). Take the sure thing, if you can get it – because nobody knows what’s going to happen and how high a price will go if it gets into a bidding war situation (still happening with almost everything priced under $500k). After some consideration, their final argument for deciding to decline was that it was not their “ideal property”.

Let’s let that sink in for a moment.

Let’s also take a moment to consider that that same condo had appreciated in market value by approximately $100-$120k since the last time it was purchased less than three years prior. No offence, but I doubt that they’d saved that much money in the previous three years (by saving or investing… as facilitated by the freed-up cashflow enabled by renting ‘cheaply’).

So was renting such a ‘great deal’ for them after all?! Or, did they just shoot themselves in the foot? Discuss amongst yourselves.

 

Do you really have the luxury to be picky?!

 

I understand completely that a box in the sky (i.e. condo unit in a high-rise apartment building) isn’t for everyone. It’s a lifestyle choice for sure – with all the advantages and disadvantages that come with it. As with any ownership proposition, there’s a learning curve, too. However, local prices are now such that condos are quickly becoming the de facto option (i.e. the only option) for first-time buyers simply because free-standing properties (i.e. a stand-alone house) are now out-of-reach.

The tough love lesson here is that unless you’re willing to live way out of town, you’re going to have to recalibrate (i.e. lower) your expectations as to what is reasonable to expect in a first property. It’s all age and stage. And London isn’t rinky-dink cow-town anymore, either.

(Also very few people take into consideration the cost of commuting – so moving out of town isn’t going to save you nearly as much as you think it might… just wanted to point that out.)

 

Some considered advice

 

Far better to buy whatever you can afford in the moment, let it appreciate, and use it as a stepping stone towards what you really want. Recognizing the difference between wanting and needing is important, also; remember, needs before wants.

Rome wasn’t built in a day but if you start today and take the bull by the horns, you’ll find yourself on the journey towards owning your own future. Step outside your comfort zone – because that’s where the growth happens. Now that’s empowering.

Let’s get you there. I can help.

 

 

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