That`s a good article.
I think the key thing to remember is why are your purchasing the property?
If it`s for a vacation property - that`s sounds attractive, but I think it`s better to invest your money in a long-term rental property in Alberta and simply pay for the vacation property like all the other tourists. The negative cash flow that will most likely occur if you purchase a place in the South will not make financial sense.
If the property will be your home for 4 to 6 months a year, then the time to buy in the South is very near, Summer I believe will be the ideal time based on the forecasts of the amount of mortgages that are coming due and other market factors.
Todd
I think the key thing to remember is why are your purchasing the property?
If it`s for a vacation property - that`s sounds attractive, but I think it`s better to invest your money in a long-term rental property in Alberta and simply pay for the vacation property like all the other tourists. The negative cash flow that will most likely occur if you purchase a place in the South will not make financial sense.
If the property will be your home for 4 to 6 months a year, then the time to buy in the South is very near, Summer I believe will be the ideal time based on the forecasts of the amount of mortgages that are coming due and other market factors.
Todd
I just came back from Arizona. I agree with what Todd says. Also, make sure you pay a visit to Arizona when you are doing your research and understand the local demographics. I did a drive around with my wife and was an eye opener.
There are big posters everywhere, even in the airport, advertising real estate properties for $30,000+ per unit. Don`t buy into the hype. Do the research.
QUOTE (ToddStokowski @ Feb 24 2008, 09:22 AM) That`s a good article.
I think the key thing to remember is why are your purchasing the property?
If it`s for a vacation property - that`s sounds attractive, but I think it`s better to invest your money in a long-term rental property in Alberta and simply pay for the vacation property like all the other tourists. The negative cash flow that will most likely occur if you purchase a place in the South will not make financial sense.
If the property will be your home for 4 to 6 months a year, then the time to buy in the South is very near, Summer I believe will be the ideal time based on the forecasts of the amount of mortgages that are coming due and other market factors.
Todd
There are big posters everywhere, even in the airport, advertising real estate properties for $30,000+ per unit. Don`t buy into the hype. Do the research.
QUOTE (ToddStokowski @ Feb 24 2008, 09:22 AM) That`s a good article.
I think the key thing to remember is why are your purchasing the property?
If it`s for a vacation property - that`s sounds attractive, but I think it`s better to invest your money in a long-term rental property in Alberta and simply pay for the vacation property like all the other tourists. The negative cash flow that will most likely occur if you purchase a place in the South will not make financial sense.
If the property will be your home for 4 to 6 months a year, then the time to buy in the South is very near, Summer I believe will be the ideal time based on the forecasts of the amount of mortgages that are coming due and other market factors.
Todd
AZ, like NV or TX has strong internal population growth (i.e. Latino babies) and very strong in-migration from CA, Mexico and colder places like NE USA and Canada and thus, will grow again and prices will bounce back up !!
Did you know, for example, that TX has an in-migration higher than Alberta, and had it for over a decade ?
However, you have a very seasonal clientele in AZ .. more so than in NV or TX .. and thus, likely negative cash-flow especially summer .. so think if you can afford the negative cash-flow and if this offsets the likely equity gain in 2009 and later ..
the time to look is NOW .. and the time to buy is: SOON .. as sub-prime 2nd peak is around May/June 2008 (first was fall 2007) and then will SHARPLY drop later in 2008 .. 2009 sub-prime resets are at about 20% to 25% of 2008 sub-prime resets only !! So, with continuing immigration and prices bottomed out later this year, they will start to rise again later this year !
If you can find a property below replacement cost / construction cost that suits your lifestyle for, say a 2-4 month annual stay, with little to no income, and you don`t mind the negative cash-flow while it sits empty, then yes, GO FOR IT NOW !
Look around locally though .. check the comparables .. don`t rush .. and be prepared for some real surprisingly good deals .. but some desasters also such as: 1/4 finished communities with a plan for a pool and a golf course that may not happen for 5 years as the developer may go bankrupt before he has sold the remaining houses ! Walk with your eyes wide open, know what you want .. but yes: it makes sense to buy this year if 2-5 months of sunshine at a golf course or a pool is your goal while your friends here at home slip and slide along the frozen sidewalk !
Send me an invite once you`ve got a deal ... and moved in .. I enjoy red or white wine .. or preferrably a Hefeweizen beer !
Did you know, for example, that TX has an in-migration higher than Alberta, and had it for over a decade ?
However, you have a very seasonal clientele in AZ .. more so than in NV or TX .. and thus, likely negative cash-flow especially summer .. so think if you can afford the negative cash-flow and if this offsets the likely equity gain in 2009 and later ..
the time to look is NOW .. and the time to buy is: SOON .. as sub-prime 2nd peak is around May/June 2008 (first was fall 2007) and then will SHARPLY drop later in 2008 .. 2009 sub-prime resets are at about 20% to 25% of 2008 sub-prime resets only !! So, with continuing immigration and prices bottomed out later this year, they will start to rise again later this year !
If you can find a property below replacement cost / construction cost that suits your lifestyle for, say a 2-4 month annual stay, with little to no income, and you don`t mind the negative cash-flow while it sits empty, then yes, GO FOR IT NOW !
Look around locally though .. check the comparables .. don`t rush .. and be prepared for some real surprisingly good deals .. but some desasters also such as: 1/4 finished communities with a plan for a pool and a golf course that may not happen for 5 years as the developer may go bankrupt before he has sold the remaining houses ! Walk with your eyes wide open, know what you want .. but yes: it makes sense to buy this year if 2-5 months of sunshine at a golf course or a pool is your goal while your friends here at home slip and slide along the frozen sidewalk !
Send me an invite once you`ve got a deal ... and moved in .. I enjoy red or white wine .. or preferrably a Hefeweizen beer !
Thomas I`d be happy to buy you a Hefeweizen.....
but probly when I`m in Canmore, Arizona is not realistic yet for me, I need to build more positive cashflow properties yet.
It would be way cool to have a place down there, some of the young pros from my bike racing club spend part of the winters there and Steve Bauer (also from our club) does a tour down there every year.
Bizbee Az appeals to me for some reason
but probly when I`m in Canmore, Arizona is not realistic yet for me, I need to build more positive cashflow properties yet.
It would be way cool to have a place down there, some of the young pros from my bike racing club spend part of the winters there and Steve Bauer (also from our club) does a tour down there every year.
Bizbee Az appeals to me for some reason
Our latest research, discussed at the REIN Workshop in February is showing that prices should start to stabilize in key areas in the US Feb 2009. Foreclosures will start to peak in about October 2008 (following a peak of re-set ARM mortgages in late spring early summer 2008).
This drop in values will hit not only sub-prime borrowers but also A-borrowers because many strong borrowers have also re-financed (or arranged an equity LOC) based on the inflated values that were driven too high by the `anyone can get a mortgage` frenzy in the previous few years in the US. The banks will not like loans being larger than the underlying asset (even with their strongest clients).
The worst hit will be the Phoenix, Vegas and Florida condo regions.
Head back to the facts, take out the Goldmine Scorecard, ask the tough questions so you you don`t get caught up in the `it sure looks cheap` mentality that many are following right now.
This drop in values will hit not only sub-prime borrowers but also A-borrowers because many strong borrowers have also re-financed (or arranged an equity LOC) based on the inflated values that were driven too high by the `anyone can get a mortgage` frenzy in the previous few years in the US. The banks will not like loans being larger than the underlying asset (even with their strongest clients).
The worst hit will be the Phoenix, Vegas and Florida condo regions.
Head back to the facts, take out the Goldmine Scorecard, ask the tough questions so you you don`t get caught up in the `it sure looks cheap` mentality that many are following right now.
I was doing a search on the net and also was told to check out this community.... Not a bad price for a new house! It seems to be a growing area as well. http://www.newhomesource.com/YAHOOREALESTA...7182/view-media I am sure that there are many areas to pick from as well. All personal preference.
The consensus out there seems to all point to buying in one year`s time when it comes to resale homes, but i have not heard anything about new homes except builders offer lots of perks.
The consensus out there seems to all point to buying in one year`s time when it comes to resale homes, but i have not heard anything about new homes except builders offer lots of perks.
Here is our story of buying a sun-belt property in the USA, our plan and how it has panned out so far.
We bought in Palm Desert California in January of 2003. Our choice was a small duplex condo on a golf course so we could rent it seasonally to cover most of the expense of ownership, while we waited until we wanted to use it more ourselves. We just got back today from a 16 day stay down there - and I can tell you that time is getting much closer now.
We paid 136k in 2003 and have spent about 12k on renovations and furniture since then. Value peaked last year at about 300k and now has fallen back to about the 270-280k range. Coachella valley median values are down 8.5% from January 2007, while San Bernadino and Riverside Counties are down about 25%. Note that this area is a little more insulated from the wild swings seen in other sun-belt communities, but it costs more to enter that market.
We chose Palm Desert because we have friends with homes there and because direct flights were on the drawing boards then (we now have 2 airlines serving Calgary to Palm Springs Oct thru May). It is a short flight and we can go down for just a few days. Isn`t that just like Don has taught us - buy near a transportation improvement!
The rental plan has worked very well, but even at that and with nice and high rental rates it cannot quite cover all its costs.
If your plan looks something like ours I suggest you look for something in an area that has a longer rental season. Some examples would be Tuscon AZ (not crazy hot in summer and close to Mexico) or Lake Havasu AZ, which has a great summer rental season as well as a winter season. And remember that if you are going to be absent for much of the year that you will have security and maintenance issues to address. We pay a small business to go in and check the place monthly while no-one is there, and the community is gated so access is controlled.
Our next move may perhaps be to buy a larger unit this coming fall or winter, and hold our current unit as a rental until that market takes another run up - they always do, but I think it will take a while.
Oh, and done more benefit - my golf game stays in good form year-round!
We bought in Palm Desert California in January of 2003. Our choice was a small duplex condo on a golf course so we could rent it seasonally to cover most of the expense of ownership, while we waited until we wanted to use it more ourselves. We just got back today from a 16 day stay down there - and I can tell you that time is getting much closer now.
We paid 136k in 2003 and have spent about 12k on renovations and furniture since then. Value peaked last year at about 300k and now has fallen back to about the 270-280k range. Coachella valley median values are down 8.5% from January 2007, while San Bernadino and Riverside Counties are down about 25%. Note that this area is a little more insulated from the wild swings seen in other sun-belt communities, but it costs more to enter that market.
We chose Palm Desert because we have friends with homes there and because direct flights were on the drawing boards then (we now have 2 airlines serving Calgary to Palm Springs Oct thru May). It is a short flight and we can go down for just a few days. Isn`t that just like Don has taught us - buy near a transportation improvement!
The rental plan has worked very well, but even at that and with nice and high rental rates it cannot quite cover all its costs.
If your plan looks something like ours I suggest you look for something in an area that has a longer rental season. Some examples would be Tuscon AZ (not crazy hot in summer and close to Mexico) or Lake Havasu AZ, which has a great summer rental season as well as a winter season. And remember that if you are going to be absent for much of the year that you will have security and maintenance issues to address. We pay a small business to go in and check the place monthly while no-one is there, and the community is gated so access is controlled.
Our next move may perhaps be to buy a larger unit this coming fall or winter, and hold our current unit as a rental until that market takes another run up - they always do, but I think it will take a while.
Oh, and done more benefit - my golf game stays in good form year-round!