Part 1. Why Canada? Invest in the future, not the past
Full disclosure: I am a Canadian; I watch ice hockey, add ‘eh?’ on to the end of a sentence and built a Cash Flow fortress in Real Estate right here. But that’s not the reason why I invest where I do.
Now, you’re probably reading this article because you are either curious about investing in Canada or have done so already. Well, that’s good because I’m going to shed some light on where I invest and why. I also will tell you how you can apply these same principles to do the same, not just in Canada, but anywhere where the fundamentals are strong enough to warrant putting your cash there.
Let’s go back a little. My wife and I spent a just over a decade based in Japan, running a successful consultancy over there. We had corporate clients such as Honda, Sony and Subaru using our services. We found ourselves faced with a very pleasant conundrum; where to put cash generated from our business. We looked high and low for ‘quality’ investment vehicles, trying many, some with success and some with less than stellar results. To make a long story short, we decided to invest in real estate. We read books, took courses and waded into some of the public and private real estate funds available, again some with success and some with mediocre to poor results.
These ‘poor’ results got us thinking “What can we do to mitigate our risk and increase our profits – and at the very least, hang on to our money?”
That’s when we started drilling down to what really drives any real estate market, anywhere. Period. We discovered, and most veteran investors will tell you, economic fundamentals are the driver of any real estate market.
Don’t forget we were living in Japan. We could literally put our money anywhere in the world; we weren’t tied to Canada because we didn’t live there. In fact, it took more work to invest back into Canada than it did to invest in Japan, South Africa or the U.K. for example. When we made this mathematical equation we got Canada for an answer.
(real estate +plus safety) = Canada.
Return on investment
The filters we used further broke our search down to the province of Alberta and the city of Edmonton. There are other good spots to invest in Canada as well, but our first filters lead us here.
The Top 5 Economic Fundamentals To Study
1. Economy – are there diverse industries to weather economic ups and downs?
3. Real Estate Cycle – is the area beginning to flourish or sounding a death rattle?
4. Political Leadership – is there a positive growth oriented atmosphere?
5. Transportation and Infrastructure – is this an area that will benefit from infrastructure change?
During our decade of life abroad, we learned that to grow money safely, steadily and successfully in real estate you need these fundamentals above. That’s not to say that you can’t make money speculating in real estate, because you can. You can lose it too. What we’re doing is investing based on fundamentals. We’re looking for the safe, slow steady – not the fast and risky.