Real Estate Investment in PEI for Fun and Profit
Article by Ron Wesley
Investing in real estate, whether in PEI or elsewhere is surely a good investment in the long-term (and sometimes the short term too) as real estate, land, in other words, is the one thing that, while there is truly a constant requirement for more, is in all practical sense available in a finite amount. There is no new land being created (well in very special circumstances land is created).
However, while all real estate markets may in general go up over the long-term, some of the “hotter” markets are more volatile and the ride much wilder. These markets may not be for the “faint of heart” or more accurately those who do not have the extra money to be able to ride out lows in order to be positioned to enjoy the benefits of the highs. Remember if you buy a property today at $ 100,000 and tomorrow the market price goes down and the property is worth say $ 90,000, you may think you lost $ 10,000. However if you don’t sell you have lost nothing in actuality and quality real estate will always bounce back and appreciate in value. If, however, because of the need to realize capital you sold at $ 90,000, then you would actually have lost the $ 10,000.
That’s why if you are playing in the big markets you must have sufficient capital to “hang in”. PEI however offers a much less volatile market, with good potential for gains while minimizing the down-turns. Rate of return on most PEI real estate investments is a stable, moderate increase with one exception. Waterfront property is on the rise as indeed it is everywhere, however PEI can still boast waterfront properties priced well below other markets such as those on the eastern US seaboard.
Within the waterfront real estate market here on the island there are a variety of possible investments. You can buy summer homes ready to move into, existing subdivisions, simply buy a fully serviced lot and build, or you can still find tracts of undeveloped waterfront land that you can develop as subdivisions. Obviously the latter involves the most work and expense but also has by far the highest potential for returns.
However residential waterfront development is not the only area that is open to investment opportunities. Charlottetown, PEI’s capital, and Summerside, PEI’s second largest city, are both waterfront cities and both have ports as well as hi-tech infrastructure in place and, based on recent reports, more to come. Companies will locate to these cities as they see the benefit of an available and motivated workforce as well as commercial properties well below the cost to be found in other areas and with them they will bring employees to jump-start their businesses. Many of these people will stay and with the increased employment that industry will bring there will be an escalation in housing costs. So our workforce, coupled with available land and property, both residential and commercial, will be the attraction to bring industry to the island. Those who are well positioned now in these real estate markets could well stand to be in “on the ground floor”.
Perhaps you should check out the PEI real estate market. You can research online, then contact realtors that you find who handle the type of investment properties that seem the most likely to be profitable.
Ron Wesley is a real estate consultant for PEI real estate. He wrote Many Articles on the Real Estate.