This is something we talk about every day with both buyers and sellers. As the majority of our clients know, we spend a good portion of our time on development as well as selling residential real estate sales, primarily in White Rock and South Surrey. So here it is:
The top five questions I hear that lead me to talking about acreage in White Rock, Surrey and Langley.
1) I hate development and it is getting too busy here and developers are destroying our city.
OK. Not a question, but the first reason we talk about acreage often boils down to this. I understand this. I grew up in Crescent Beach and Ocean Park and I am often saddened by all the change that happens. I don't like to see all the change and all the wonderful character homes in our small city come down in exchange for somewhat generic monster homes that tend to look the same.
One of my favourite neighbourhoods was by English Bay in Vancouver and it was because it was this very low key and unpretentious neighbourhood, filled with students and renters and a great mix of people. As development started to come in this area, I was upset to see some of my favourite shops and restaurants get knocked down for residential towers and generic businesses, like Starbucks and Tim Horton's. I watched this ten years ago and it upset me and I completely understand the same resistance here. When I first moved back to White Rock, I was somewhat shocked to see all the development that had happened in the Grandview area that had replaced all the great acreage properties I spent time on with friends as a young guy in the 1980's.
But, as I have reluctantly learned, change comes whether you want it to or not. Acreage property is replaced with housing solutions for a growing community. It is often an unhappy realization for those that have enjoyed a sleepy town, but in the end, the owners of these types of properties find the money too hard to refuse in a growing community and the opportunity is too big to ignore for their family.
Ironically, the people that benefit from this, will often move to a smaller community to replace what they have lost, while they enjoy money in the bank. For the rest of us, it does provide further housing solutions, which relieves pressure on a housing market that already makes it difficult for many to enjoy any ownership at all. Without development, prices would be even worse as supply would be less.
There are no easy answers. I am just observing what I have seen so far.
2) I am a real estate agent from Vancouver, Burnaby, Richmond etc. and I would like to know if you have any acreage or development deals I can bring to my clients.
I get this probably once a day. I always like to keep good relationships with any out of town realtor that calls me, but I always have a hard time responding to this. The bottom line is, there is way more money around from people wanting to invest than there are good properties to develop. I will serve my clients first, as my clients are the ones that hear about things first. Or, if I am on the seller's side, then I am looking to get them the best deal rather than serve the interest of any one agent, which leads me to the next question.
3) I have acreage that I want to sell, but I want to get the best price and I don't want to be taken advantage of. How can you help me?
I hear this one a lot. For most of you in this area, if you have acreage, you are probably contacted on a regular basis and it is hard to tell what offer makes sense. Are there developers that try to get acreage for way less than it is worth? Definitely. Their interests are in direct conflict with your interests. That is the basic truth of it. They want your property for as little as possible while you want the exact opposite. So how do you manage this minefield? Most people wait to hear all offers or they hold out. Sometimes this can shoot people in the foot if they are the last one to holdout, as sometimes every property will go and the developers will work around them. Most of the time though, holdouts do well. However, the bottom line is knowing what your property is worth. Any developer who knows what they are doing have a pretty set formula to offset their risk in case the market turns. And believe me, those that don't know what they are doing go broke easily. There is a reason that developers need a set return before they will risk their worth. I have countless stories of developers going broke.
I always say to people, let me evaluate what you have - this is what the developers will want etc. This is, perhaps, how you can squeeze the last penny out. And sometimes, if you make the right connection, they will even partner with you, which can be the best scenario as you will enjoy some of the profit. But, keep in mind, if you want to try and share in the profit, you will also eat the loss if it doesn't work out.
4) Can you help me develop my property so I can share in some of the profit?
Yes. Some developers will do this.
5) How can I invest in acreage that will develop down the road?
How far down the road? Ten years? Is there a neighbourhood plan? Do you know how many units per acre there will be? What kind of housing will it be? Will there be commercial? If there is no plan, you will be speculating. I will also say clearly that one thing I have learned, is that there is so much money around, that whatever you are thinking of, skilled investors have planned ten years minimum ahead of you. Because of this, you are already paying for the factored in risk in most cases. I have seen people go broke gambling on this. Know what you are doing.
Skilled investors consider all the risk factors including, but not limited to, rising interest rates, lowest prices, neighbourhood concept changes, lending policy changes, market changes, restriction of capital, political changes, etc. etc. It is like the old poker adage, if you don't know who the sucker is at the table, then likely the sucker is you.
So are there opportunities? Of course. But, for you and your family, please know what you are doing before you buy that 10 acres of farmland that someone promised you will be worth 20 times as much in ten years because their cousin works on the agricultural land reserve committee etc. etc.
All the best,
White Rock Real Estate