durhamregion.com | This Week | Thursday, December 22, 2022 | 32 www.canadawindowsanddoors.com 905-665-1506119 Consumers Drive, Whitby.canadawindowsanddoors.com 0665-15905-6 ProudlyServingDurhamSince1991 Glass and screen repairsGlass and Glass and sscreen creen repairsairsGlass and screen repairs Weekday Same Day Service Available!Weekday Same Day Service Available! Glass and screen repairs EMERGENCY GLASS SERVICES ORDERS PROCESSED IN 3 TO 7 DAYS All WindoWs And doors Are mAnufActured in-house by cAnAdA WindoWs & doors And supported locAlly by our deAlers. locally Manufactured • Custom Windows • Custom Doors • Patio Doors • Assortment of Window & Door Hardware Canada Windows & Doors BOXING WEEK SALE! START MondAy deceMbeR 26TH 10AM Store Hours Monday Dec 26th 10am to 6pm Tuesday December 27th to Friday December 30th 10am to 8pm Saturday December 31st 10am to 5pm Sunday January 1st CLOSED MounT kiRby SkiS & boARdS 495 Taunton Rd., e., oshawa 905-432-7789 www.mountkirbyskisandboards.com All ouTeRweAR 40% Off MSl All HelMeTS, GoGGleS, GloveS And AcceSSoRieS 20% Off MSl All SkiS, booTS, boARdS And bindinGS 20% Off MSl *excludes packages I remember selling homes during a real estate boom a few decades ago. It was in the late 1980s, and I remember speaking with buyers who referred to themselves as developers. The word "investor" was not commonly used then, and after a buyer bought a few homes and sold them, they called themselves developers. We have seen the same "development" happen over the past few years; however, now we use the term "investor." The question is, what happens to an investor when the market goes through a shift? Here is an example of a home on a street I used to live on. The home, a bungalow in need of repair, was listed for sale and sold to an investor in September 2021. The property sold for just below $770,000 and the buyer did some major renovations on it over the next few months: They istalled a new kitchen and flooring, renovated both baths and added a powder room on the main floor, along with adding a basement apartment. The property was placed on the market in June at $900,000 and after three months it was relisted for $870,000, where it sat, finally coming off the market a month later, unsold. As a realtor with a client interested in a property such as this one, I would research what the property sold for, when it sold and what has happened to prices since the owner purchased the property. In this case, the values from the time of purchase to when it was placed back on the market had dropped about five per cent, or $45,000, which would mean that the original selling price of $770,000 would give the indication that the value (without renovations) would be around $731,000. Adding the renovations back in, it is no surprise the home did not sell for $170,000 more than it was originally sold for. What I am seeing, that happened in the late 1980s, is that some investors got caught up in the belief that the market is bulletproof, and values would continue to rise. Markets cycle, and it is easy to forget that cycles are natural. I have always viewed real estate as a long-term investment. When the market is cycling up, it looks like a safe bet to buy, "expecting" that a year from now, a homeowner can sell at a premium. The investors I have had as mentors believe that you purchase for cash flow, and that properties increase in value over time; this is the long-term objective. Any other strategy is akin to buying a lottery ticket. A large number of homes that were on the market disappear when the expected value is not achievable. Not only would little profit be made by selling, but also to sell would be at a loss. The upside: these homes that come off the market tend to turn into desperately needed rental properties and, given that they were purchased when the mortgage rates were lower than today, can be rented at realistic rates. The advice I have always given to clients is "think a minimum of five years" when considering the purchase of a property. Lindsay Smith is with Keller Williams Energy Real Estate Brokerage and has been a Durham real estate broker for 36 years. He can be reached at lindsay@buyselllove.ca. IN REAL ESTATE, PLAY THE LONG GAME OPINION BROKER LINDSAY SMITH SAYS THAT 'MARKETS CYCLE' LINDSAY SMITH Column What I am seeing, that happened in the late 1980s, is that some investors got caught up in the belief that the market is bulletproof, and values would continue to rise. SIGN UP FOR OUR WEEKLY NEWSLETTER AT DURHAMREGION.COM