Edmonton Real Estate Investor: February 2008

"It could prevent the onset of AIDS because if the virus can't get out of cells, it can't infect other cells and then that's where the problem comes from AIDS. It decimates the immune system, so if you prevent the virus from leaving cells, it basically locks it into cells and it can't spread." Stephen Barr, a researcher in the medical microbiology and immunology department at the U of A and lead author of the paper published in the Public Library of Science Pathogens journal

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In Alberta where investment is always spoken of in BILLIONS not MILLIONS - this year will stand out as the year we beat all manufacturing across Canada for the first time.

"That one small little area of Alberta is attracting more investment than every manufacturing industry across the country." Philip Cross, Statistics Canada economist

This money isn't invested "willy-nilly" with no idea of ROI - extensive research is done; every possibility factored including Royalty reviews, Kyoto accords and oil prices. It is long term thinking with an eye on the future.

So if all this investment is going into a tiny little area in Alberta there is going to be a boom on jobs, on retail sales and of course on housing.

That is why I can't think of a better place to buy investment property in Canada and possibly the world.

Global warming or an ice age which will it be? As humanity is increasingly aware and concerned by our effect on the earth's fragile climate system; scientists are not sure if man made climate changes are even noticeable and that if fact they may even be a drop in the bucket.

After a winter that is breaking many "pre-global warming" records those in the know are starting to wonder if maybe we should get down jackets instead of solar powered fans to prepare for the earth's next climate shift. Lower solar activity may cause an ice-age that could compare with one that lasted 5 centuries and caused a lot of trouble,

"The last time the sun was this inactive, Earth suffered the Little Ice Age that lasted about five centuries and ended in 1850. Crops failed through killer frosts and drought. Famine, plague and war were widespread. Harbours froze, so did rivers, and trade ceased."

I know we have to look longer than one winter for any significant climate assumptions. I have to say that either way you are leaning- neither global warming nor a little ice age sounds too appealing.

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The Financial Post has a sub-section under Small Business called "12 Weeks To Start-up" which is to help new entrepreneurs get started and motivated by successful people in business.

This week Century 21 Real Estate Canada's founder Peter Thomas was interviewed to speak on his "virtual mentors" in his early start- up days. When times were tough and there was no one to call Mr. Thomas turned to four greats: John F. Kennedy, Indira Gandhi, Martin Luther King, Jr. and Ernest Hemingway to guide him on the rocky road to success.

Each person guided him in a different way,

"For years, as he established Century 21 Real Estate Canada and became a busy property developer in Western Canada and the United States, whenever he ran into a problem he would ask himself, "What would my virtual mentors do?" For inspiration he would look at the life of JFK; as a moral compass, he would turn to King. Former Indian prime minister Gandhi supplied passion, vision and humanity. Hemingway was the "rogue" advisor, providing gung-ho inspiration whenever Thomas felt his life needed more fun or adventure."

In our business we look to Trump and Kiyosaki for business savvy and real estate acumen, Dr. Wayne Dyer and Deepak Chopra lead us spiritually and numerous travel writers and adventurers help us relax and injecting adventure into our long weeks of work.

Of course we have real life advisors who guide us through the pitfalls like lawyers, accountants and Realtors - but sometimes it is the people who you can't meet who really inspire you too new heights.

Who guides you?

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Over the last ten years Edmonton has seen and incredible 203% increase in housing prices.

"Never before have we seen such a continuous run-up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation," Michael Polzler, executive vice-president of RE/MAX Ontario-Atlantic Canada

It goes to show that real estate is a long term play, short term thinking and lack of focus can only be detrimental to investors. If you pick a market with strong economic fundamentals then buying property is sure to give you good returns over the long term. The hardest part is maintaining your focus on that area and not getting distracted by "shining little things" (read up-and-coming areas, beach front from your last vacation or a stock play tip from your brother-in-law) along your investing journey.

"If you don't have a long-term outlook, don't invest in real estate, go buy gold or stocks and roll your dice. You have to make real estate boring, because that means you're doing it right. Go jump out of an airplane with a parachute if you want excitement. Right now I am telling everybody to buy resale, to buy something built in 1997 or 1998, when there wasn't a frenzy and people had the time to finish the properties." Don R. Campbell REIN president

My statement from Mackenzie Financial Corporation came today no big shocks or surprises this time but I did get a little pleasure from a link on the Mackenzie site.

Burn Rate shows how Canadians are burning through their hard earned post-tax dollars. The Denialers "a family of four that spends like fourteen" who are "experts at convincing themselves that their financial affairs are in fantastic shape" are indicative of how many families sometimes have everything - except a financial plan.

It's a good link to spend to someone who may need need a little nudge to think about their finances.

Don't miss the Burn Rater Spending Test that will tell you how much of an over spender you are.

Due to high demand, limited supply and increasing rents Edmonton office space is in hot demand.
Prices by the square foot have increased 76% since the beginning of last year.

"Overall, office vacancy has reached historical lows, with unprecedented rental rates being achieved in both the downtown core and suburban office markets," says Canadian real estate services company DTZ Barnicke. READ MORE

The image of bamboo for tropical huts is rapidly changing as the hollow stemmed grass is being used to build churches, bridges and luxury homes.

"The relationship to weight and resistance is the best in the world. Anything built with steel, I can do in bamboo faster and just as cheaply," said Colombian architect Simon Velez

Velez has developed special techniques to ensure that weight bearing and bugs are no problem for structures made of bamboo. The environmental material is taking the world or architecture by storm and buildings made from the super grass are going up from Hawaii to China to Bali.

Read more about the amazing building material

Bestselling author of Real Estate Investing in Canada: Creating Wealth with the ACRE System, 97 Tips for Canadian Real Estate Investors and 51 Success Stories from Canadian Real Estate Investors spoke with The Edmonton Journal to warn investors of falling for hype, thinking short-term and not looking "Behind the curtain" when investing in real estate.

He explained what we can look forward to in the Albertan market,

"Edmonton's housing prices, which fell 11.7 per cent during the last half of 2007, will dip again this spring, then rebound during the second half and be up 11 per cent on average during 2008. Calgary prices will be up 12 per cent, Red Deer 10 per cent and Grande Prairie 11 or 12 per cent."

why you should only line up for U2 concerts not properties,

"When you line up around a block with 200 people to buy the condo in the sky that doesn't exist yet, put $20,000 down and plan to sell it as soon as it's built, look in the lineup and tell me how many people have the exact same mentality. Then all you need is for one guy to panic and drop his price to get out, and the average price in the whole building goes down, and you're completely at the whim of somebody else. You should only line up for U2 tickets."

and why beetles in B.C spell trouble in the future.

"And right now I wouldn't touch a town that's only forestry, because this pine beetle thing is massive -- the Williams Lake, Quesnel, Prince George corridor is going to be devastated."

He also gives great insight on where individual markets are going in the future. If you are planning on investing anywhere in Canada then read this article.

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Stelmach unveils green plan - Stelmach announced that if re-elected March 3, the provincial Tories will spend $50 million turning the river valley into the world's largest continuous park, running from Devon to Fort Saskatchewan.

Beneath university's land there lies a mystery - and possible oil riches - Nobody knows quite how it happened, but the University of Calgary and its students are about to get some first-hand experience in the energy business.

By chance, a staff member uncovered information last summer that showed the school owned the mineral rights to two sections of land south of Lethbridge near the U.S. border - an area rich with both oil and gas reserves.

Tight market fuels winter retreat boom - "Supply in most regions of the country is expected to balance demand in regular housing, but in the recreational property markets, demand should still be quite a bit greater than what is available," Phil Soper, chief executive officer of Royal LePage Real Estate Services.

Real estate affordability to improve, experts say -Housing affordability is likely to improve this year as house-price growth eases and falling interest rates make mortgages cheaper, economists say.

Real estate values returning to normal - After two years of sky-rocketing prices, numbers in the residential real estate market are beginning to return to normal, according to real estate agent Mike Gouchie.

"I think we're going to see a stable, healthy market in Central Alberta, heading into 2008," said Gouchie. "There will still be increases to the value of homes, but in the seven to eight per cent range, which is closer to normal than increases have been."

"Near-record January sales indicate that housing sales will remain strong in the Edmonton area as buyers and sellers adjust to the new pricing levels," Realtor Association of Edmonton president Marc Perras

Purchasing a property with great terms or at a reasonable price is a lot easier now than it was 6 months ago. Sellers are willing to make properties assumables or give you a nice reduction because they don't want their property sitting on the market any longer.

"Prices are stable and are not expected to drop sharply despite the large inventory," Perras said.

Single family dwellings showed a minuscule drop at 0.6%, duplexes and townhouses fell 1.7% and condos rose 1.9%. Overall residential properties rose 1.7%.

Yesterday I found a gold nugget in the boot of my car. My friend asked me over to his place to get a second set of eyes on it before he listed it for sale.

He’s spent the good part of a year renovating the 2 houses on both sides of his. And now it’s almost time to put them on the market. He’s added several nice touches including a Koi pond and a gazebo in the back garden. As the weather gets colder and the ice starts to thicken, it’s a perfect place to sip coffee and watch the carp swim about drunkenly. Somehow the fish survive - though the temperature is as mild as a Vancouver winter. These additions are more from the heart than for the wallet. Carl’s embellishments may be just the right touch to sway certain buyers and perhaps even deter a few.

The recovering alcoholic photographer for instance, loved what he could do with the wine cellar. It's true, he didn’t see a wine cellar he saw a darkroom: cool and temperate for his sensitive films. He was the one that brought up the fact that he no longer drinks.

But, what about the chunk of gold in my trunk you ask?

I found an old Robert Allen book, Multiple Steams of Income. I’d read the revised version a few years ago. Challengingly I flipped it open and dared Robert to show me a new stream- and he did in about 30 seconds. It was a copywriting niche that with a bit of time and research could pay off for the right person. What really impressed me was the “idea” of creating multiple streams of income. That book and others like it are brilliant because they teach you to “fish“ and therefore, never go hungry.

If you depend on a single revenue source to provide for your future you’re supported on a stool that could topple at any time. Can it take the weight of a recession, unexpected illness or worse? Probably not, your table needs 3, 4 or more legs so that if one is eliminated, you won’t even wobble.

Building multiple streams of income will not only strengthen your reserve but also help protect from the risk of a sudden amputation and keep your table standing. Stocks toppling and U.S. Subprime woes, reinforces the fact that having cash flow coming from multiple sources is crucial.

Some properties you’ll own for capital gains, others for cash flow, some stocks for dividends and others for wealth creation, a few online stores for passive income and so on. These building blocks form an excellent foundation enabling you to safely shift, but not crumble, if a financial earthquake should hit.