There is a poem by Robert Frost called “The Road Not Taken” that has the distinction of being the most misread poem in America, according to the Paris Review.
I know what you are thinking.
Yet another real estate article comparing misinterpretations of classic poetry with property appreciation in the greater Toronto area. If you’ve read one of those emails, you’ve read ‘em all.
I promise I’m going somewhere new with this, so bear with me.
The poem talks about choosing between two paths in a forest and has the writer eventually choose “the one less traveled by, and that has made all the difference.”
If you want to read the full poem and hear why it is considered the most misread poem in America, check out this article.
When I hear this poem, I immediately think about how by taking a different path, real estate investors can make lots of money.
(This is a common theme in my life, where great works of art prompt me to think about real estate. You hear Beethoven, I hear the perfect score for a virtual tour. You see a Monet, I see a great colour scheme for that bathroom renovation my client is doing. It’s sad really, but I’m working through it in therapy.)
So what is the road not taken in real estate?
Simply put, it is an approach that differs from what the majority of sellers and buyers do.
I say “differs” rather than “is the opposite” because I am not talking about a contrarian approach, where you sell when everyone is buying and vice versa.
In my experience, the key factor in making money in real estate is the level of competition.
At it’s most basic, this means:
- If you are buying a home that appeals to most people, you have lots of competition and the purchaser will have to pay a higher price to get the home.
- If you are selling a home that doesn’t appeal to most people, you have less interest, which means less competition, which likely means you don’t make as much money on the sale.
When working with clients, I strive to make sure that when we buy, we aren’t choosing a home with features they don’t need, that puts them in competition with other buyers who will pay more for those features. On the sell side, I work to make sure the property appeals to as many different types of buyers so that we get the most interest and the best sale price.
All well and good you say, but is that really the road less taken, the path less travelled?
In fact, the absolutely best opportunity to make money in real estate is by pursuing real estate ventures that are more complex than the typical transaction. The more complex it is, the fewer people compete in that space, which means you have the opportunity to make more money.
I’ve created a chart that shows the type of transaction and the level of competition so you get a sense of what opportunities exist, in both house and condo options. I’ve started at the easiest type of transaction with the highest amount of competition and worked my way up to quite complex transactions with far fewer people interested.
To be clear, the more complex the transaction, the more you need experienced partners who can help you navigate to your desired outcome. The harder a project is to complete successfully, the less competition you face, and the greater the potential return is on it if done properly.
Along those lines, changing zoning or severing one piece of land into multiple properties are both complex activities, but potentially highly lucrative.
If you or someone you like wants to create wealth through real estate, I’d invite you to get in touch with me. I’d love to be responsible for what comes next.
HIERARCHY OF OPEN SPACE
Outdoors, people always try to find a spot where they can have their backs protected, looking out toward some larger opening, beyond the space immediately in front of them.
Think of the get together’s you have been to at friends where you spent time outside in the back yard. When you think of those spaces, I would bet that the ones you found most comfortable followed this rule. You likely sat in a smaller area, such as a deck or garden, and you naturally arranged yourselves to face away from the wall or house and looked out at the open space available.
When you are considering buying a property or renovations to your home, make sure that the outdoor space adheres to this rule. If you do so, it will be a welcoming area of the home and add greatly to your resale value.