​​Climate Change in Real Estate Investing

Hello and welcome! In my role as the CEO of Marrisa Holdings, I lead a team in developing strategies for stimulating growth in key sectors of the Canadian economy, including real estate and healthcare. My team and I are constantly evaluating new investment opportunities and researching different sectors of the economy to forecast potential growth. Today, I’d like to analyze the increasing risks posed by climate change to urban areas and real estate investments and the importance of urban resilience in mitigating these risks to ensure long-term sustainability.

When looking at urban investment properties, I think it’s becoming vitally important to consider urban resilience in the growing face of climate change.  What I mean is, if I’m looking to invest in, say, a residential or commercial building downtown, I want to know how likely it will be that the area where my investment property is will bounce back in the face of climate change.  If there is a potential flood, for example, will I watch my investment property literally wash away? Or is it an increased risk of being burned down by wildfires? Thankfully, a few American websites can help determine the risk certain properties may face due to increasing climate change. I think tools like this will become even more valuable as time goes on, as properties with the lowest risk of being affected by climate change will prove to be safer long-term investments. 

At this point, the climate change genie is fully out of the bottle. As such, I think it's important for fellow investors to seriously consider looking into things like flood-resilient infrastructure and technologies.  You may think that you don't need them now, but consider it like insurance. As an investor, I want to essentially "future-proof" my investment, and that is exactly what investing in things like elevated rail lines has the potential to do. Remember, investing in a property, no matter the location, isn't a sprint; it's a marathon. That's why it's called investing and not flipping. However, there is certainly value in the latter for an investor. 

As climate change continues to manifest itself, we as investors must adapt. Too often, people choose to ignore the issue, saying, 'Flooding won't happen here, so why worry?' It’s an appealing mindset, of course, but it’s a dangerous gamble, especially when it comes to your investment property.  For the sake of your portfolio and peace of mind, thinking and investing with a long-term perspective is crucial. 

So, to recap, when looking to invest in any urban property, think long-term - and not just a year or two down the road. Think in terms of decades. Make sure that the area you're investing in is capable of experiencing urban resilience, especially when it comes to climate change. And finally, look into things like flood-resilient technologies to protect your investment for the long haul. This way, the money you spend will keep making you money. The future is yours, invest wisely.