Real estate is a hot topic these days. Given the possibility of interest rates rising sharply at some point, some say the property market is due for a correction. Others believe tangible assets are the best security in volatile times such as these.
Recently, I was invited to attend a family meeting of a clan we’ll call the McKenzies, a family of long-time business owners to discuss this important topic. Since coming to Canada over 45 years ago, the McKenzies have done well by owning a specialty manufacturing business. But the bulk of their wealth has come from real estate. The family holds a substantial real estate portfolio, including residential, commercial and industrial property, almost all of it in the Greater Vancouver area.
Now that mom and dad were ready to pass on the family business to their four children, the family wanted to gather perspectives on whether this focus on real estate would serve them well in the future.
As I told the McKenzies, a lot of wealthy people have made a lot of money in real estate, particularly in Western Canada, and particularly here in Vancouver. I have no doubt that they will continue to do so over the long term. But there’s no way to be sure whether real estate will be a better investment in the future than a privately-held business, for example, or a portfolio of publicly traded stocks…
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Written by: Thane Stenner
Date: November 15 2010