Over the years I have been approached many times about buying property as an investment. I don’t know if it is the abundance of real estate TV shows that prompts the queries but they seem to have a common theme. These “Investors” are looking for a fire sale that they can do a makeover on and flip it for big profits. Unfortunately most just want to do what I call a Lipstick makeover. Cleaning, painting and decorating is all they want to get into and then turn a $30-$40K profit. Not likely to happen!
Buying , renovating and selling is a viable option but it’s going to take more than paint and wallpaper. Most of the reasons houses sell for low prices is they have inherent issues that turns buyers off. Usually these are age related design and layout issues. If it has 1960’s flooring, kitchen cabinets and bathrooms, buyers are turned off and it sits on the market. Interestingly enough, this crosses all age groups. In my day a young first time home buyer would buy a rough home because they could afford it and they would spend the next 5 years updating and fixing it. Current young first time buyers are not used to fixing things. The days of putting new tubes in the radio are gone. When it doesn’t work anymore you throw it away and get a new one. They don’t buy 20 year old cars. They finance a new or almost new one. The same goes for houses. They have not been raised with the fix it up or improve it ethic or skills so they are looking for a house that is “ done”. This applies to the more mature and retiring generation also. They have done this their whole life and just want to buy it already finished or new.
The next challenge is greed. I learned a saying many years ago. Speed, price, quality...........pick two. Speed of sale ( days on market), selling price and condition of the property. You have to balance these to get the best end result. If you do a superficial update then you will get a lower price or it will take longer to sell , maybe never until you get the price in line. If you do a quality update then it will either sell faster or for top dollar price, but probably not both. It’s always a balance of all of these. If it were cheap, easy and risk free, everyone would be doing it. Smaller profit bites more often nets a full tummy over big bites that you may never get to swallow.
How’s the market? There is good news. Here is a quote from the Victoria Real Estate Board.
Strong Victoria real estate market again in October. The Victoria Real Estate Board today released its report on real estate activity in the Victoria area for October 2014. 602 properties sold in the Victoria region this October, an increase of 17.6% when compared to the 512 properties sold in the same month last year.
"Here we are again, a month in 2014 ending with more sales than in 2013," Victoria Real Estate Board President Tim Ayres says. "This year has been a solid year for local real estate - indeed we are only 154 transactions away from meeting the total number of sales from 2013 - and there are two more months left in the year!"
The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core this time last year was $547,800. This month the benchmark value increased to $553,900.
"All year we've seen a decrease in the number of active listings and increase in sales compared to 2013 numbers," adds President Ayres. "Last year at the end of October we saw 4,322 active listings, and this year we see 3,927 active listings, that's a 9.1% change."