A Certain amount of uncertainty is a Certainty
Other
Real estate investors I talk with are voicing a common theme:
There is so much uncertainty out there right now. In the past it was much easier to predict the probable outcome of investments. Now it is hard to decide what to do because there are so many potential variables.
The Canadian government is keeping interest rates low to stimulate the economy, but at the same time are making mortgage qualifications more difficult to prevent a “housing bubble”.
The USA government is doing “quantitative easing” which is another way of saying printing more money for themselves to buy government bonds to support their monetary system.
Governments around the world are at a stalemate. They cannot agree on what course to take.
In the USA, the President is a Democrat while the house is controlled by Republicans. That is a formula for getting nothing constructive done all at a time when decisive leadership is needed.
Canadian employment statistics look good but the debt level of the average Canadian is high. They might decide to pay down debt instead of buying stuff that would stimulate the economy.
What do you make of all this?
Here is what I know:
A small percentage of Canadians are homeless. The vast majority are homeowners or tenants. Some people own more than one home or there would be no place for tenants to live.
Real estate is the only investment that someone else buys for you.
What a great concept! A person should try that. Your name on the title and someone else pays for it. This is a Win! Win! Win! sitution. but…
What if house prices fall?
Then your house is worth less than the tenant paid and your name is on the title. You win!
What if the house prices stay the same?
Then your house is worth the same as the tenants paid and your name is on the title? You win! Win!
What if house prices rise?
Then your house is worth more than the tenant paid for it and your name is on the title. You win! Win! WIN!
Conclusion:
If you buy a house or condo and rent it to some fine tenants. In time they will pay for it. You will own it. Then you win!
Let President Obama and Prime Minister Harper quantitatively ease the economy all they like–just buy a house or two and rent them to some nice tenants.