Investment time

by Darrin DeRoches November 15 - 21, 2012

It’s coming close to the end of the year and the phones are starting to ring on investment properties. Investors start to realize that they need to either invest their earnings for the year or they will be paying tax on these earnings in a short six weeks. Every year at this time all the investors I have been working with over the past ten months start to come out of the woodwork. The only problem is that the inventory is low and the prices are high.     I spoke with a building owner this week that has had his downtown property up for sale for at least six months. I asked how it was going and he told me he had three offers on the place. Sounds good but why is it still on the market? First two offers were “lowballs” and the third was right on the money but the buyer could not get the money. Unfortunately this seems to be the pattern for this year. There are the same few investors who take a look at every property that comes up and then they wait to see if it sells. When the listing gets a little old they come in and make a “lowball offer” to see if they seller is desperate enough to sell. It may work one time out of a hundred but it just wastes a lot of time and energy. The second scenario of an accepted offer and the inability to raise the money is more common.      It is still hard to raise the money needed to buy a property in downtown Hamilton. Yes, we are rated the best place to invest in, but the banks are still slow on the concept of lending money to investors looking to invest in the number one community in Ontario and Canada. This particular property and a couple of the others that I have been involved in this year have all had a few stumbling blocks to get sold but things are getting better. I was looking to send commercial properties in the downtown area to my client today and I saw three conditional sales on properties that were listed in the past 60 days. They are not sold yet but the offers have been accepted and I am confident that they will sell. The companies selling them deal with a lot of commercial properties and they tend to have qualified buyers who are serious and dedicated investors.     The residential market begins to slow down for the upcoming holidays but the commercial market tends to spark up for the same period, so if you are considering selling your commercial or income earning property you should put it on the market and take advantage of the strong economy and high interest in our city. The government is not raising taxes for next year and the economy is looking strong which translates into money flowing into investments. Real estate is the best investment one can make in today’s economy and Hamilton is going to be number one all year long! V     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.