Don't Buy a Home
Or at least think twice before buying a home. Heck, think three times.
Do I have your attention? Okay, now that I’ve brought up real estate, one of Vancouver’s favourite and most hot button issues, let me say that I’m not against home ownership. It's a traditional dream and the received wisdom says it's better than renting in the long term, but that's not always the case. Buying a house at the wrong time or for the wrong reasons is a great way to mess up your finances.
Now, I'm not a real estate agent, but I think these are some key points to consider.
There’s such a huge amount of noise out there about real estate. So much of it is fuelled by developers, real estate boards, and others with a vested interest in fuelling the hype around real estate. Think of my contribution here as a tiny counterbalance to all that coverage.
Now, I was thinking recently about all the disclosures required when I’m working with a client who is considering a mutual fund or other investment. There is such a strong environment of disclosure and transparency on the rise in the investment industry here in Canada and British Columbia, but sometimes it seems like there isn’t the same understanding about the details of a real estate purchase. Many of these cautions I apply to investing in a mutual fund could apply equally to real estate:
• Past Performance May Not Be Repeated
• Borrowing Money to Invest is Risky
• Diversification is Key
• Fee Disclosures
• Sales Restrictions
In this seven-part series, I’ll share how these disclosures might apply to real estate. Hopefully you’ll pick up a few points to ponder about the risks in investing in Vancouver real estate.
Check back next week for the next installment in this real estate series: Past Performance May Not Be Repeated. You can also drop me a line to hear more.