IAN ALLEN/STAFF PHOTOGRAPHER
Deborah Cumming of Century 21.
Ashford W. Meikle, Staff Reporter
SUNDAY BUSINESS speaks to Deborah Cumming on investing in real estate.
Sunday Business: Why real estate?
Deborah Cumming: I've done many investments and the best investment I have ever made in my life and that has paid has always been real estate.
I would like to encourage more young people to get into the real estate market. Real estate is not just for the rich. There is opportunity out there for everyone. My advice to people who want to get into the market is not to necessarily go for your dream home at the outset. Get your foot into the market at the outset buy a one bedroom or a studio something you can afford and can sell later on because you are going to have capital appreciation in the long run. Real estate is a long-term investment.
Last year a property on Braemar Avenue saw approximately 30 per cent of the units being bought for investment purposes. Real estate is ideal because owners get capital appreciation as well as the rental income.
SB: What are the prospects?
DC: The market is very buoyant and we expect it to be the same in 2006. There has been a lot of construction, and a lot of pension funds are investing in real estate. Also interest rates are now down so it is now more affordable for a lot of individuals to access mortgages to purchase property. There is a tremendous amount of development taking place in the New Kingston area.
SB: Do you anticipate prices falling?
DC: I don't see prices coming down. The stock market did not perform all that well last year, and a lot of people took money out of the equities market and placed it in the real estate market. I think what you are going to see is a levelling off of prices which I am seeing now in certain areas of the market the very high end of the market you are definitely seeing a levelling off.
"The average sale price within our organisation has moved from four million to nine and half million dollars. There is a shortage of inventory in the middle of the market, that is, $4 to $15 million.
SB: Which locations do you suggest?
DC: Investors must look at location because a lot of the foreign companies that have come into the market recently are looking for convenient locations for their staff with easy access to their offices.
These companies tend to bring in lot of technical personnel so the New Kingston area is attractive because of ease of movement and it is central, and there is a tremendous amount of construction going on there.
It also depends on the market you are going after. If you looking at the upper end of the market segment then there is the diplomatic community and as well as the foreign companies who bring in their top managers and their families so you would want to look at the Kingston 6 and Kingston 8 areas - relatively safe areas - with gated communities with three and four bedroom townhouses.
SB: What are the common mistakes people make?
DC: People don't get enough information. They need to find out who the developer is, get some background information on the developer. They don't find out about the engineers. Call the real estate boar and find out if the project is registered. It has to be registered. It has to be approved by the KSAC so that's the first step. They should often walk with a licensed real estate broker or agent who is going to lead them in the right direction and ensure that what is presented is what they are going to end up with at the end of the day.
It's important to know about the engineers ... the lawyers, people who are financing the project, terms or conditions, mortgages, the ins and outs of getting a mortgage.
SB: What is happening with rentals?
DC: Because there are more rental properties on the market because of all of this new construction with people looking at investment properties, the volumes of rental have gone up but the rental prices have gone down.
That is not to say it is not an investment to look at because you are getting the capital appreciation on the property. And there are very few countries in the world where one can buy a property, turn around and rent it, cover your mortgage and put money in your pocket.
