Toronto Escorts

Realty, Investments, & some basics

Bear669

New member
Apr 9, 2006
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Wilds of the GTA
tboy said:
Ok let's compare apples to apples then. If you're living in an unpopular area and pay little in rent because of it then it goes without saying that any properties for sale in that same area will be lower in value no?

If one sells a property and has no equity in it then they outta have their head examined. 1) they must have bought it with no money down (silly) otherwise you'd at least have THAT equity in it 2) They refinanced the property to the total value of the property which means you've (figuratively speaking) used the equity already 3) The place wasn't maintained which means the value dropped substantially 4) you sold at the worst possibly moment.....

Yes, I agree, purchasing property must be treated like an investment and if you don't maintain that investment, you'll lose. Just like any stock bond or investment certificate.

If one loses on property now, they have to be doing something wrong with purchasers getting into bidding wars over a property and sellers getting 10 20 and sometimes 50 grand over their asking price.

As for your historical references I agree, many previous models will tend to repeat themselves but you have to admit, nowhere in the modern world will property values decline and not recover for 100 yrs? Even with the recession of the early 90's it only took 4 yrs for the economy to recover and everyone STILL made/can make money on property bought then.

For eg: in 1988 starter homes were going for $79,000.00 about 1/2 hr drive from Yonge and Bloor. Now those houses are going for $500,000.00 and starter homes are averaging $249,000.00 and they are 1 1/2 to 2 hrs + drive from Yonge and Bloor.....

I have started this thread with a Q from another that was about buying a condo in the GTA. I thought the topic had ranged widely and a new/broader thread might be of interest to some (or not).

First- I am NOT saying the realty is a bad investment. Just that some folks have made comments that are entirely too simplistic and absolute.

Second- Here are some sources that can express things much better than I:

www.blacktomflint.ca Best geopolitical analyst in Canada, maybe the world.

www.poorcharliesalmanack.com Buy this book by Warren Buffet's 'poor' partner.

Neither has anything direct to say about condos in the GTA, but if you read these, you will have a much better understanding of Life, The Universe and the Meaning of Everything.

Before I respond to some of TBoy's points, I will mention that I used to have a realtor's license and I am an expert at discounting cashflows. I had a long career as a moneylender, recently retired as a VP of one of the safest banks in the world. Since I didnt get the job via nepotism or politics (not my forte), they presumeably thought I was doing something right.

Responses:
"..unpopular area..". True, but so what? Values could still go down more.

"...head examined..". Actually young fella (you MUST be young), I have had my head examined a lot. Even very intelligent people can make bad investments in realty (geez, Sheik admitted he lost $20k on a deal or two!)or anything else.
..1.. Not 'silly'. In realty, investments and business, it is called 'leverage'. Can be very risky, but it can be very profitable.
..3.. Maybe. What if the neighbourhood deteriorated? What if the condo corp did a lousy job?
..4.. So what? Even the most brilliant investors sometimes sell too low and buy too high.

"...maintain.." If you know how to MAINTAIN a stock, bond or certificate-I'd love to learn more.

"..something wrong.." A pointless comment, since you havent put it in any kind of context. Even if you did, it doesnt mean that realty is risk free.

"..100 years..". No, I do NOT have to admit anything. Your own examples show that you are not a historian. And you are wrong, I absolutely guarantee that not everyone made money in the time span you reference.

And, my second favourite realty story:

Fella told me (1989) that his Dad had bought 100 acres just after WWII for $1.00 per acre. Much of it was rural scrub, but he made a few $ raising potatos. Guess what he was offered in 1989?.....

$1.50 PER ACRE

(of course the property is near Timmins)
 
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