Early in my real estate career, a senior REALTOR® shared a piece of advice that has stayed with me forever.
"You make money when you buy real estate, not when you sell."
At the time, I understood the words, but I wasn't sure I fully understood the meaning.
Today, after helping buyers and sellers through multiple market cycles, changing interest rates, bidding wars, corrections, uncertainty, and everything in between, I think I finally do.
Most people assume profit happens when a property is sold.
In reality, the foundation for that future profit is usually established the day the property is purchased.
The Difference Between Price and Value
One of the biggest mistakes buyers make is focusing exclusively on price.
Price is what you pay.
Value is what you receive.
The two are not always the same.
In every market cycle, there are properties that everyone wants.
The fully renovated home.
The perfect street.
The perfect view.
The perfect floor plan.
The property that photographs beautifully and attracts dozens of showings the first week.
There is nothing wrong with buying a great property. In fact, many of these homes are excellent purchases.
The challenge is that everyone else can see the same thing.
When buyers compete aggressively for perfection, much of that value is often reflected in the price.
The real opportunities tend to be less obvious.
Opportunity Rarely Looks Perfect
Over the years, some of the strongest purchases I have seen shared a common characteristic.
They weren't perfect.
They were:
But they had something more important underneath.
They had potential.
Potential in the location.
Potential in the floor plan.
Potential in the land.
Potential in the neighbourhood.
Potential that the broader market had not fully recognized yet.
The buyers who performed best over time were often the ones who could see beyond what a property was and recognize what it could become.
Buying the Worst House on the Best Street
There is an old real estate saying that has survived for generations:
"Buy the worst house on the best street."
Like most clichés, it exists because there is truth behind it.
Great neighbourhoods tend to remain desirable.
Strong locations tend to attract investment.
Good streets tend to pull values upward over time.
The house itself can often be improved.
The location cannot.
Many buyers spend years searching for perfection when they would be better served searching for opportunity.
Those are two very different things.
The Tale of Two Markets
Today's Vancouver market continues to remind me of this lesson.
On one side, there are properties that attract enormous attention.
The best homes.
The best duplexes.
The best family properties.
The best view homes.
The cream of the crop.
These homes continue to generate strong interest because buyers recognize quality.
On the other side are properties that require vision.
The homes that need work.
The homes with deferred updates.
The homes where buyers have to imagine what could be rather than simply accepting what already exists.
That is often where opportunity lives.
Not always.
But often.
Long-Term Thinking Wins
The most successful real estate decisions are rarely made by people trying to predict what will happen over the next six months.
They are usually made by people thinking about the next ten years.
They ask different questions.
Instead of asking:
"Will this be worth more next year?"
They ask:
"Will people still want to live here ten years from now?"
"Can I improve this property?"
"Does this neighbourhood have long-term appeal?"
"Am I buying quality at a reasonable price?"
Those questions tend to produce better decisions.
The Real Lesson
The advice I received all those years ago was never really about making money.
It was about discipline.
It was about patience.
It was about understanding value.
It was about recognizing that great real estate decisions are often made before everyone else agrees with them.
Sometimes opportunity feels uncomfortable.
Sometimes it looks imperfect.
Sometimes it requires imagination.
But when I look back at many of the strongest purchases I have seen over the years, they almost always had one thing in common:
The buyer understood the opportunity before the market fully did.
And that is why, more often than not, you make money when you buy real estate, not when you sell it.
Since you already made it this far, chances are real estate is somewhere on your mind. If you're considering a move, an investment, or simply want a second opinion on an opportunity you're looking at, can I help?