Let’s start at the beginning.  What does being an investor mean?  To me, this means that I’m buying something that will give something good in return.  This “something” good is the “value” of my investment and this “something” that I’m looking for is cashflow … of course, with the added bonus of appreciation (the price for this “something” that will go up over time).  In my case, my “something” is real estate because of all the advantages I have talked about in my previous blog entries. Now, that is what I call a “VALUE” investor … the type of investor who purchases valuables (i.e. real estate) that generates cashflow and appreciates over time.

Your own definition of value may be different and that is fine with me.  However, note that your definition of value and how the masses see value will determine what kind of strategies you will use when investing.  As mentioned, value to me is defined by how much cashflow it can generate.  Some people see value as how much it’s worth in the open market.  The old golden rule of economic in supply vs demand is very important in understanding the value of your property.  The more people who want it, then the more it’ll cost (thus, a bidding war which is quite common these days in the Toronto market)!  The more people want to live in your neighbourhood, the higher the value.  On the other end, the lesser the supply, the chances of you getting higher price is higher, whether you’re the buyer or the seller.  In the case of the West Vancouver market, this area is viewed by many wealthy people internationally as one of the best places to live and therefore, the properties and the land in this region are limited.  And because the supply is so low, it drives up the price, thus the market.

My blog this month is not to give everyone an economic lesson but to remind us, as investors, to look at value and see what you are truly buying.  Is buying a $300k condo in downtown Toronto that cashflows $100 per month after 20% down payment really worth the investment when the supply continues to increase rapidly in the next two years?  At CE Properties, we are very keen on buying properties with great value at a discount so that we can profit from day one.  Remember, we say, you make your money when you buy and you reap your rewards when you sell!  So, with this in mind, are you a value investor too? 

If you are interested in investing alongside CE Properties, please feel free to contact us.  We love to help you reach your investment goals too!