To Buy or Not to Buy: Today's Residential, Recreational and Investment Real Estate

The questions on everyone's mind lately seem to be "where is the Real Estate market headed?" and "should I buy now or wait?"

The answers can be different for different people based on your income level, your local rental market, your local Real Estate Market, how long you expect to own the property and your comfort level and personal goals:

1. Can you afford to own the type of property you need/desire? This is where it all starts, do a household budget. Whether its your first home or your first recreational property, make sure you can afford it

2. Can I buy for a monthly/yearly cost similar to renting? If the cost of owning is similar to renting, becoming a homeowner should be a strong consideration. Make sure you factor in the costs of the mortgage payment, house insurance, property taxes, water and sewer charges, garbage pick-up charges (if any), saving some money for maintenance every month (this is a smart approach to limit budget-crushing surprises) and strata fees, if any. On the home ownership side, make sure you print out an ammortization schedule of they type of mortgage you're considering. With interest rates so low, nearly 50% of a mortgage payment can be going towards principal nowadays... this is where it really starts to make sense.

3. What is my local market doing? Are property values increasing? Decreasing? Stable? Stable to Increasing? Stable to Decreasing? Regardless of general overall economic times, your market could be doing any of the above. Even in one town or city, you can have areas that are stable and/or trending upward and areas that are unstable and/or trending downward. Here's what the rich guys know: " regardless of market conditions, property is almost always worth buying at the right price. Many opportunities are missed waiting for perfect conditions." Do your homework, get insight from an honest and knowledgeable Real Estate Agent... avoid low producing Agents and Snake-oil Salesman.

4. How long do you expect to own the property? The longer you think you'll own the property, the more sense it makes to own. Talking in extremes; if you are only going to live in the home or use the recreational property for the summer, it's probably not the best idea to buy. It cost's money to buy real estate and it costs money to sell real estate. Even in a stable of slightly increasing market, you can go backwards owning property for the short-term. If you are going to live in or use the property for the next 30 years, you'd be foolish not to buy. You pay off a mortgage over that 30 years and, regardless of where the market is today, there will be some strong value cycles over the next 30 years.

5. What benefits are you looking for from the property? Stability?: I don't want to have to move ever 6-12 months Consistency?: I want to raise and build my family in one home for the next 5-10-20 years Lifestyle Improvement?: I want a place for the family to meet and gather a few to several times a year, I want to spend my weekends and holidays at a little getaway, a little piece of paradise, a place to call our own.

There are lots of questions to consider when you're looking to make a big investment such as Real Estate. Having said that, timing could be in your favour to purchase in the coming months.

In a Nutshell:

Residential Primary Home: Rates are great... really great. If you're going to be around for a while and you can find the right place at the right price, it really does make sense to buy. Do keep in mind, a 20 year ammortization builds equity way faster than a 30 year ammortization. Balance what you want with what you can afford

Recreational Property: Again, rates are great. If you can afford it and if you can buy within 4 hours of where you live, a getaway for family and friends can really increase your quality of life. The rec market has been fairly soft, there are some great buys out there... but you have to be looking for them and you have to be ready to act on them.

Investment/Revenue Property: Yup, you guessed it... interest rates are great. Make sure you have a long term outlook and make sure you know the market you are buying in. With some homework and a creative mind, you can truly find some good opportunities.