Jul 27, 2012 / 11:00 am
We hear that the golden rule of real estate is location, location, location - and that is of course a very important consideration. However we have a client who shared an even better rule with us and we'd like to pass it along.
Many years ago, our good client Brian told me that the key with successful real estate investing is to always buy a Pinto. He asked me if I knew what a Pinto was and I replied, "Yes, an inexpensive car, right?" (Wondering what a cheap car had to do with buying a home)
Brian went on to tell me that a Pinto is a rare horse (sometimes called a Palomino) with unique spots on it. He said that when you are looking to buy or sell a regular brown horse, the market would dictate its value. If there are a lot of regular brown horses for sale, then the prices are low. Less of them listed for sale and the prices are higher. However, Pintos tend to be less affected by market fluctuations.
This is a brilliant rule to follow when you are investing in real estate.
We advise our clients to choose a home that is hard to compare to others. If you purchase a home that has very similar homes in the neighbourhood, then recent sales are going to dictate closely what your home is always worth. However, a unique home that is hard to compare to others will maintain its value better. It is more difficult to determine the market value of a unique home and therefore those homes are less susceptible to market fluctuations.
Now you don't want to choose something that's so unusual that it won't appeal to many buyers... but if you choose carefully and select a home that offers something different than the masses, your investment will be better protected.
Tamara Stone Personal Real estate corp.
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