JeffreyStark

Effective immediately, I will be using my new Word Press blog at;

http://burnabyrealestateblog.com/

I found it necessary to move because this platform lacked the flexibility of integrating the latest in social media components.

This site will remain up for another month, but all the new posts will be posted on the new site.

Thank you for following and reading my blogs, and I will continue to publish the latest moves in our local real estate market, to help buyers and sellers make informed decisions.

 See you at; http://burnabyrealestateblog.com/,

and Thank You for your support

Jeff

Last few days everyone has been speculating as to what the BOC will do with the Bank Rate.

Some of the experts and economists have been asking for the rate to stay at .75% and others felt that the increase can be tolerated.

Whatever the big boys do, we the paying public know that we are a long way from prosperity and can use all the help we can get.

So what will it be? Read this from Financial Post..
Looks like Carney is looking to the stars for some help!

The probability that Mark Carney, the Bank of Canada governor, will raise interest rates by 25 basis points, to 1%, increased to slightly more than 60% on Friday from less than 50% as of late August......
More here

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

Over the years I have made a number of so called, "investors". Buyers that want to invest in real-estate and are expecting a return. Nothing wrong with that, right?  These  "investors" were poorly informed, and with some grand ideas that the only way to make a profit in real-estate is to steal the property.

A number of them have taken Robert Allen's  real-estate course. I am sure you have heard of it, Robert Allen Ultimate Real Estate System.

His real estate course claims to give you a potential of 16-50% return on investment and being able to purchase properties for 30-40% below its true market value.

Hey, with those kind of claims, even I went to an introduction. In my opinion, most of his systems are designed for the US  market and don't work too well here.

Nevertheless, I am sure they will provide a novice with some good information to use in his real estate investments. For a lot less they could have subscribed to a better source, in my opinion, Ozzie Jurock's, facts by email or fax, for only $177, saved a lot of money and got some good tips on real estate investing in Canada.

 Back to my point of this blog.

These real estate investors would come by my listings, look them over, and decide that because the view was not great, and the location, (low floor level, or whatever), they were not buying. Interesting! They never talked the numbers. ROI? Potential rents? Long term outlook?  None of that seem to matter.

 When I asked them, why are you concerned about the view, their reply was re-sale. Couldn't figure that one out. If you get a good deal today, and have ability to rent and earn income, and if the market goes up 10% in 5 years, how much more will you get for your suite?  These must be the same people who couldn't figure out this puzzle; If a fish and a half is worth a dollar and a half, how much would you pay for 5 fish? Quickly! What's the answer?

 So here is another example. I have this listing in Central Burnaby. 2563 s.f, Vancouver special, on a 33 foot lot and priced at $639,000. If you check North Burnaby listings it's the best priced home for homes in size between 2200 and 2650 s.f. Close to BCIT, it's a perfect investment. No lack of renters. On top of that the seller, who used to rent it to students, is including all the furniture. Turn key operation! So why didn't it sell yet?

The other day I get a so called investor; he looked over the property, spent some considerable time and came back for the second look. Because it backs onto the highway, he felt that it would be a problem to sell. On the same street, backing the same highway, are some recently built and sold duplexes. Mostly two bedrooms and they sold in mid $500,000. Family's live there, and the noise doesn't seem to worry them.

But wait, this guy was an investor! Investor shouldn't be worried about these things.

The home has been rented for over $4000 p.m. I did a calculation based on a 4.1% interest, allowed 6% for vacancy, took into account all the expenses, taxes, allowance for repairs etc. After all that there was a cash flow of just over $14,000 over the five years.

With a 20% down payment, PPT, legal and inspection, the initial investment would be $142,180.

After 5 years, the principal would be paid down by $65,408.

If the market moves up only 5%, you can sell the property, pay the commission, pocket some $8,700 and that with the $65,408 would give you around $74,000 as a return on the $142,180 you invested when you bought the place 5 years ago. Where can you get that kind of a return?

Yeah, but my "investor" said, but the noise?

Some of the richest people in the world have made their money in real-estate. Holding and renting and selling when the time is right. Believe me, they didn't worry about views, locations, street nose or being in the best neighbiourhoods.

And that's my opinion. What's yours?

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

So here we are. Everyone is an expert in predicting what real estate will do in the next year. Me included.

Why not? My predictions are as good as any of the experts out there. Does any one rem,ember what they were telling us just a year and a half ago? Predicting doom and gloom, just like in the USA. Prices will collapse and you will be able to buy a home in Vancouver for half the price.

I said it would not happen and if you are interested I can tell you why. But that is not what this blog is about. By the way all those experts actually got paid for all those doom and gloom predictions. I didn't.

So assuming that we, just like the weatherman who has a lot more scientific meteorological help in predicting the weather, really don't know what is ahead. And the weatherman only predicts a few days ahead.

But here is what I know for sure. The numbers. Ahh , the numbers. You can make anything work with numbers.

Anyway. let's assume that you decide to buy this TH in Burnaby listed for $289,000. Yo got 5% down payment, and that will leave you a mortgage of $274,550. At 3.99% interest rate on a 5 year term and 25 year amortization, O.A.C., (and I heard of lower rates), your monthly payment would be $1442.

But, listening to all those experts, you say to yourself, I will wait for the prices to come down. So you wait and sure enough, the prices are down 10% in a year from now and you decide it's the right time to buy.

Wait!. While you were waiting for the prices to come down, the mortgage rates went up 1% to 4.99% (same terms as above) Your calculation on a lower selling price shows that your mortgage will only be $260,100 and your payment $1435 p.m.
Not much difference in payments, but you saved $25,900 off the price. Sounds pretty good, right?

Well, lets just look at the details. At 3.99% over 5 years you would have paid $35,585 towards the principal, and at 4.99% you would have paid $28,431.

Applying these two amounts to the two different mortgages, it would still leave you with a lower balance even if you paid 4.99% interest, by $7276 after 5 years.

So you are still better off by waiting, right? WRONG!

Unless you were staying in your parents basement, you were probably renting. A one bedroom apartment would have cost you, conservatively, $750 p.m., x 12 = $9000. You saved $7276 but paid someone else $9000 for rent.
You actually LOST money. $1724! You could have taken your sweetheart for a nice holiday and have some shopping money left.

Not a great deal.
This calculation does not include some incidental expenses, but it was designed to illustrate that low interest rates are more important that a price of the property.

Unless you are investor/flipper, and you have gobs of money burning a hole in your sock, this is not for you. You can wait and pick your time.

But for the rest of us mortals, the message is, if you are ready to buy, do it now. It won't get much better than this.

Happy HOMEHUNTING! 

Create your own video slideshow at animoto.com.

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

With all the heat we have had in the last few weeks, it didn't seem to have much effect on the local real estate.

It's cooling and cooling fast.

We have just started a new report; MID MONTH REPORT FOR SALES ACTIVITY
which will update sales trends in detached and attached, (condos and townhomes),  category.

If you like me to add you to the email list for this particular report, just drop me an email with send me mid month report in the subject line.

What this report will give you a sneak peek at the trend in sales activity, so you don't have to wait for the Real Estate Board monthly sales report.
If you are thinking of selling or buying, this report will tell you what you may expect when you decide to buy or sell a property.
A rise in sales activity would be good sign to buy, before the prices respond to stronger activity, or if you were sitting and waiting for a market move to sell, this would give you heads up before everyone else find out and start listing.
This month report shows that sales activity is still in decline anywhere from 30% to 100%, depending on the area and type of property.

Here is this months Mid Month Report

 If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net