“I am amazed financial gurus seldom suggest buying a second property. We live in a real estate hot spot. If you buy a house or condo with 25 per cent down and it appreciates by 25 per cent, you have doubled your money.
Rents in Vancouver have seen stagnant periods but have rarely dropped, allowing the investor to wait out temporary downward blips in the market.
There is no tax payable on appreciation until the property is sold and then capital gains tax apply based on the owner’s (retirement?) income.
Obviously such an investment requires some management effort but in the past 35 years a 33-foot lot in Vancouver’s West Side has risen in value from $14,000 to over a $1,000,000 ($28,000 per year!) and I’m sure the next 35 years will bring golden returns to lucky owners.
I wish my RRSP (registered retirement saving plan) had done that well!”
- ‘Saving for retirement? Real estate is your best bet’, Andrew Renton, ‘Opinion’, Vancouver Sun, 18 Feb 2012 [hat-tip E.G.]
Haven’t we been saying we’re in speculators up to the eye-balls?
Most are ‘shadow’ speculators, unaware themselves that they are speculating.
But guys like Andrew are aware of what they are trying to do, and are examples of one of the purer breeds, just one step away from the pure short-term flipper.
How do these RE holders respond when “golden returns” don’t accrue in the imagined fashion?
When 15% drops mean you’ve lost 60% of your money, and prices then keep dropping??
They bail — All those second and third and fifth properties become supply.
Also, they cease to be demand.