Does HGTV have an influence on the audience? Positive or negative?

Reality home shows, such as those on HGTV, can be both educational and informative, whether you’re learning about the building industry, what colours pair up nicely or what rug goes with that leopard print chair. As a real estate agent with a background in construction, I am able to objectively assess how my businesses are being portrayed to you, the viewer. Ever wonder if the information you are receiving is relative to you?

Most of these home shows are American. Comparing their financial and real estate market to ours, in Canada, is like comparing apples to oranges. So, this comes as a surprise when ‘Joe Blow home flipper’ gives me a call while still on a motivational high after completing his latest real estate seminar which, is nine times out of ten American based, asking me to find him foreclosed and under valued properties. When I ask him what his intentions are, it’s usually the same answer I get from all uneducated and newbie investors – “To make more money in one month than I would all year at my stupid job.” I usually proceed in asking, “Well, what’s your plan? Do you currently have the funds in your bank account for the 20% down payment, renovation and holding costs while you market this property for sale? Is your plan to sell the property and cash out leaving you to pay hefty capital gains on your profits, or to rent it out yielding maximum return on investment avoiding paying the government their part (A great strategy for the savy investor)?” At this point they are usually overwhelmed stating, “I never really thought about it, what do you mean capital gains?” I won’t dive too much into these strategies, as this could fill another blog entry, but know what you’re getting into and the laws in YOUR country and province. Before you take on a flip, become the expert in your niche, which is the single most important thing in order for any business to become successful. Flipping property is usually known as a veteran investing strategy and is not recommended for the first time investor. Flipping property is highly speculative – hoping the reno goes smoothly, hoping it sells quick, hoping you get your asking price etc. Notice the word ‘hope’ a lot? There are a lot of variables that can go wrong during the process. You HAVE to be an expert in this niche and knowing where your market is and where it’s going to be when you sell, is common practice among sophisticated investors. I know a lot of investors who are extremely successful flipping properties in Canada; they also know this business better than anyone! Most importantly, they don’t rely on information and strategies from an American T.V show such as “Flip That House” and expect it to work in the Canadian markets.

Ever wonder how realistic the renovations are in some of these reality home shows? The budget must be endless! A simple bathroom renovation turns into the “Taj Mahal.” Besides being entertaining, is this really relative to you, the average consumer? Are you left asking yourself who ends up paying for these jobs? Is it actually the poor family who just got taken for ride from a previous scum contractor forking out the cash for this massive reno? How is that possible? Sponsors! Big name shows have huge amounts of sponsorships meaning that most of the material, which is usually over kill, is given to the show for FREE (in exchange for that products exposure). That’s why you’re seeing three layers of sub-flooring ensuring your tiles will never move during a hurricane, top of the line granite countertops in a basic townhouse and the best tools and technology. Don’t get me wrong, the way the work is done on these shows are fantastic and I believe all contractors should be doing this high caliber work, but the reality is, most consumers cannot go the extra 10% and “make it right”.

The big take away from this article is when watching these shows, which I am completely guilty of, is to “look behind the curtain” as a great mentor of mine always says – Don R. Campbell – owner of REIN (Real Estate Investment Network). If you are looking to invest in real estate like a sophisticated investor, feel free to contact me anytime and visit my website. I specialize in getting my clients cash-flowing properties in great areas that often greatly outperform their current stocks and mutual funds.

Mat Piche

RE/MAX Real Estate Centre

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