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Alberta Households At Risk!

Apparently Alberta households are among the most vulnerable in Canada and have the greatest potential risk to negative economic occurrences. This is directly from a report released by TD Economics and says Alberta is second only to B.C. for financial vulnerability if one of the following three events takes place

• house prices go through a substantial correction
• there is a major disruption in incomes
• or if there is an unexpected large increase in borrowing rates.

They also forgot to mention if Earth is invaded by aliens property values would also severely be affected. Seriously, does it get a bit tiring to you for all these negative reports to continually come out so they can grab some headlines?

If you actually read into the report they actually say “the probability of one or more of these negative events occurring in the coming years is relatively low”. So why even bring it up? The country is just recovering from a recession, the last thing we need is someone sitting in a cubicle in some back office at a bank (a bank which just happens to be making huge profits) making predictions of negativity.

Real Estate Investor Perspective

I mentioned I would start providing some perspective from someone who buys investment property in my posts, so here it is. While it pisses me off that all this pessimistic publicity continues to pop up everywhere, it’s actually a good thing for investors.

It puts fear into the hearts of people on the fence and keeps them in the rental market. After all if some economist says there is a chance the values could drop, there is a chance right? Better stay renting so I don’t get burned. It’s thinking like that which is exactly why the masses never get out of the rut they are in.

The herd mindset keeps the masses where they are and allows the individuals who actually look at the big picture to move forward. Look at Donald Trump, do you think he didn’t hear more than once that property is a bad investment? Yes he almost lost everything, but now look where he is, because he didn’t fall for headlines like the one on this story.

If someone told Warren Buffet when he first started that there would be not just one, but multiple setbacks to the stock market during his investing, do you think he would have been deterred? Maybe he did pay attention and just went into it a bit more prepared, well perhaps you can too.

If values drop, people will still rent, they will be scared of the housing market for ages allowing investors who are not over leveraged to continue to receive great cash flow. If you understand that cash flow is the priority right now for any Real Estate investment you will be absolutely fine.

What are your thoughts? Will you continue to buy property? Are you too scared of all the doom and gloom predictions? Maybe you just feel better off staying in your nice secure job with Nortel, no not Nortel,  Enron, hmm maybe not Enron either, Compaq, right they don’t exist anymore either and laid off people too, hmm, anyway stick with your secure job wherever it is and you will be just fine.