HELLO 2010

by Darrin DeRoches Jan.7-13,2010

I know I’m not the only one who is happy that 2009 is over, but more importantly the first decade of the 2000s is over and we should take stock. 2009 was such a bad year and everybody is so happy to be starting a new year and decade that we are just looking forward and trying to forget it all happened. It’s like a bad drunken night that is not hard to remember. But do we really want to remember? As all good investors do, we must look back to predict the future. In our communities real estate has once again proven to be the best investment. Our last decade has reaped an increase of 76 per cent in the overall real estate market. If you were to compare this increase to any other investment, gold would be its only rival. The stock market will tell you about how RIM(Blackberry) made an incredible 300–plus per cent increase this decade, but that is just one stock. If you take the overall stock market, making money happens but building wealth does not. The stock market is like a casino: the house always wins. In real estate, you are the house! The average Joe can invest their hard earned money into a few simple things – stocks, bonds, gold, and real estate. If you look past the last decade and do a history lesson, you will see that real estate goes up and down in the short term, but it always goes up over the long term. The big guys with all the brains say we are going to have a bubble in 2011, but they were wrong this year with their predictions. The beautiful part about real estate is it may go down for awhile, but it will rise again. You may have to sit on it until the market corrects. And although you can sit on gold, you cannot live in it. Let me repeat myself by saying real estate increased by 76 per cent in the past decade. My parents bought their first house 40 years ago for 12 grand; that exact same house would sell for $212,000 today! I bought an income property ten years ago for just under $130,000 and I am getting an appraisal this week which should come in around $260,000. Doubled my money? Not really, because I put down only $20,000 (double would be $40,000) and if it appraises for $260 I made about $180,000 in 10 years ($60,000 is left on the mortgage). So double? More like nine times the money! I am not the smartest guy in the class. The only smart thing I did 10 years ago by taking that $20,000 and investing it in real estate. So take that 20 grand today and invest in a $200,000 home and in 10 years it may double or it may multiply by nine times – but one thing for sure, it will grow. Happy New Year! V [DARRIN DEROCHES] Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.