By Patrick Francey
Economic uncertainty. Since mid-2008 these two words have, in one form or another, dominated the daily media headlines and permeated people’s lives. Few Canadian’s lives have been unaffected by the impact of the global economic downturn. We are reminded that the skies will not clear soon and the doom and gloom could continue for years to come by an endless stream of economists, professional forecasters, and talking heads.
This presents a dilemma for many uneducated real estate investors. Economic uncertainty is a double-edged sword, with investment opportunity on one hand and the feeling of an increased financial risk on the other.
The past five years have seen a divide in the real estate investor mindset: Inaction (sit on the sidelines and wait until things turn around) or Action (invest and risk greater loss or larger returns). Information, and the source of that information, drives this division. The inexperienced investors read ‘sky is falling’ newspaper headlines and see dire predictions on television, unemployment statistics, increasing consumer debt levels, mortgage rate uncertainty, and stock market volatility. They turn to friends, colleagues, and even strangers for opinions and advice.
Too often, these sources are merely rehashing and reshaping their opinions based on the attitudes and outlooks of others. And because too many “experts” come to their position with preconceived biases, investors see only faded images and fuzzy forecasts.
For some, the effects of the crash of 2008 have been both devastating and long lasting. There is no lack of experts who predict we are not in the middle of a recession or near the end of one, but actually at the beginning of a far greater economic abyss.
My partners and I too felt the effects of the past economic storm. However, we continue to draw on our reserves of experience, capital, and connections with fellow business owners and real estate investors. We continue to seek opportunities within the uncertainty instead of just mitigating or minimizing the risk potential.
Before I started this article for this premiere issue of REIN Real Estate Report I decided to look back at the last five years of economic challenges we faced – and continue to face – in Canada. Officially, our recession lasted just seven months: November 2008 to May 2009. Again, as in every recession over the last 30 years, the Canadian financial system came out the other end stronger, healthier, wealthier and more resilient. We are the envy of the other G8 nations, if not the rest of the world.
As any good agronomist will tell you, following a destructive forest fire, the re-growth results in stronger, healthier and more valuable trees. While our economic forest fire was catastrophic to many, the recovery is ripe with opportunity.
I know that, speaking for the entire REIN™ Team, we see our Members armed with a healthy understanding of real estate investment opportunity proven through a history of results, poised in the present to capitalize on the future. REIN™ Members are a resilient community of sophisticated real estate investors. They are built to conquer to carve out prosperous and sustainable financial futures from an economic landscape seeded with opportunity.
Our view of the future is of excitement for REIN Members and other investors who understand that economic uncertainty opens the door to opportunity for real estate investing.