Benefits of equity and homeownership in the Rainy River District

By Laura Balanko-Dickson
Staff writer
lbalankodickson@fortfrances.com

According to Kathy Judson, Sales Representative for Re/Max covering Kenora, Fort Frances, Thunder Bay and other locations in between, the benefits of homeownership in the Rainy River District extend beyond simply gaining equity. Moreover, she described the low-risk and high-reward nature of gaining equity via property ownership due to the necessity of paying for housing. Furthermore, Judson suggested the stability and affordability of the housing market in the district reflects the “true value,” while other Canadian markets like Vancouver, Toronto, Edmonton, or Calgary can fluctuate significantly depending on the current influx or absence of corporate property management groups.

“In a nutshell, you’re going to pay somebody’s mortgage,” said Judson. “Whether you’re paying your landlord’s mortgage or you’re paying for your own mortgage, you’re going to be paying for a roof over your head… If you’re paying a landlord’s mortgage, you never get to take advantage of the increase in prices or the growth of your equity or anything like that.”

So, Judson described the dilemma of staying in rental units and deferring responsibility to a landlord, and the “tremendous amount of equity” homeowners get because of market prices increasing.

“You don’t put anything into [rentals] and you don’t get anything out of it. But, you’re still making monthly payments for it,” said Judson. “What I’ve found over the years is that many people gain a tremendous amount of equity just through markets increasing… Over a 15 [or] 20-year period, you’re going to almost always see a rise in prices by a substantial amount.”

Additionally, Judson explained homeowners can reap simply from the upward trend in housing prices in the district.

“Generally speaking, most people do find that their investment in real estate, whether it is their own personal home, or if they buy an investment [residential] property, or if they buy an investment commercial property … whatever they do, they tend to reap the benefit of increased equity over time,” said Judson. “There’s very few people that lose money on on real estate.”

Judson also contrasted the stable investment of real estate with the sometimes volatile nature of the stock market.

“Generally speaking, in our society, it’s a very good investment,” said Judson.

“It’s not like the stock market that goes up and down. It depends on what you put into it.”

So, Judson suggests homeowners pay attention to market trends and upgrade their property whenever and however they can.

“If [the homeowners] are being smart about it, and they upgrade, and they pay attention to what’s happening in the trends and that sort of thing, they will then reap the entire benefits [of homeownership,]” said Judson. “I think the risks are minimal because you are going to be paying for the roof over your head one way or another.”

Moreover, Judson described the simplicity of the real estate market as a whole, in addition to the stability of real estate in the Rainy River District.

“Real estate is very simple. It’s all about supply and demand. So, if you’ve got a whole bunch of buyers and no sellers, prices are going to go up. If you’ve got a whole bunch of sellers and no buyers, the prices are going to go down,” said Judson. “Because supply and demand just creates the market, the thing that’s very interesting in our area, or at least in my experience, the thing was very interesting is, is it’s not a paper inflation.

“So you look at some of the big cities, Toronto, Vancouver, Winnipeg, to a degree, Calgary, Edmonton, those centers, over the years, have what we refer to, or have referred to in the industry, as a kind of paper inflation,” she continued. “So a whole bunch of people come into the country from wherever they’re coming from, immigrant populations to come in, or investors come in and buy up units. And so that is what we would call more of a paper inflation. Here, people are buying places and moving into them. So, you’re getting a true value exchange.”