With prices having doubled in the past ten years, now is the perfect time to sell your Kitchener Waterloo investment property. I read a brilliant piece on buying investment real estate by Tom Bradley from the Globe and Mail this weekend.
The end of the third last paragraph states: "Real estate has enjoyed a long upward cycle and with 12 good years comes a high degree of complacency." In other words, today's investors think investing in Kitchener Waterloo real estate is a "no-brainer". Shrewd investors recognize that most people follow the crowd. They capitalize by selling when greed is the norm and fear is absent. Likewise, the savvy investor buys when an asset class is out of favour.
Over a 23 year career in real estate, one gains insight. I got my license to sell with the Kitchener Waterloo real estate board in the spring of 1989. The veteran salespeople shared stories of speculative buying where a purchase in October closed the following April and translated into a quick $40,000 gain. Alas, it ended in 1990 when 5 year mortgage rates climbed over the course of the year from 11% to 14.25%. Predictably, sales plummeted from 4,177 residential MLS sales in 1989 to just 2,354 sales in 1991, a decline of nearly 44%.
Interestingly, the properties that fell out of favour the fastest were rental properties and condominiums. Power of sales on Waterloo student rental properties were so prevalent that banks refused to finance them. Developers of big condominium apartment projects lost millions with the likes of 35 and 55 Green Valley Drive and 321-339 Northlake Drive.
So why sell now? In a word, liquidity. Sell now while there is still an appetite for the investment property asset class and mortgage financing is available. I don't know what the "tipping point" will be for the next downturn in Kitchener Waterloo real estate. Tom Bradley's article contains a fairly comprehensive list of possibilities and you can read it here http://is.gd/mskczr.
If you agree now is the perfect time to sell your Kitchener Waterloo investment property, feel free to call or email (519)505-4488 firstname.lastname@example.org
Century 21 Home Realty Inc. Brokerage
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