Investing or speculating, what’s the difference? Many people enter into the game of investing in real estate with the plan of buying a property, holding it for a period of time (1 year or more) and then selling it for the appreciated value. This is not investing but rather speculating because it is no different than putting money in the stock market with the hope that it will increase in value.
Unfortunately far too many new investors fall prey to the greed of easy money which appears to be available during times of high appreciation such as they experienced in Calgary and Edmonton from 2005-8. This is fantastic while markets appreciate but unfortunately what goes up must come down and when this happens it happens quickly and can be devastating.
If your focus was “Cash Flow” first and foremost then the depreciation would not be nearly as devastating. There is nothing wrong with playing the speculation game, just realize the risks are far greater than investing in real estate.