by The Paul Rushforth Team
8. November 2009 15:39
I have noticed a trend lately. With lower interest rates - combined with media attention focused on the so-called "recession", potential investors are calling looking for a property that they can do a "flip" on. That is, buy a property in poor condition - perhaps a bank repossession - fix it up and sell it for a quick profit. The challenge that I am finding is that many of these people have no idea what they are looking to get into, and often don't have the funds or necessary skills to be able to pull it off! They have watched a few episodes of "Flip That House" on TV, and through the miracle of editing and production, it really does look easy. But is it really that easy?
Well, sure it is if you have 20% to put down as a down payment to avoid CMHC fees, and lots of cash on hand to fund the required renovations along with a trusted contractor that is available to do those renovations quickly to enable immediate turnover. You also need the money in the bank for the carrying costs, the closing costs such as legal fees and land transfer taxes, as well as factoring in the real estate fees when it comes time to put it back on the market.
The other reality is; we're in Ottawa- we really aren't dealing with a recessionary situation in this city. And it isn’t very often that we find run down older homes in need of renovations in sought after neighborhoods. That being said, there are always opportunities for those who are patient enough to wait for the right house to come along and plan their resources accordingly.
The other great news for investors in Ottawa is that our stable, consistent economy means that there are fantastic options for investors who are willing to buy a property and hold it - renting it out while the resale values climb which typically requires less capital up front than a flip scenario. There is also a steady stream of potential high quality renters constantly moving to Ottawa. OttawaOttawa University, Carleton University, Algonquin College or Cite Collegiale. There are also great income property opportunities in Ottawa, particularly in Vanier, where the property values have not enjoyed the same level of appreciation in resale values, but the number of potential tenants remains healthy. It's a great time to be an investor in Ottawa, regardless of what investment strategy you wish to employ gets many people relocating for jobs with various government departments, to work with the RCMP or National Defense, to attend
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