Avatar's Blog
» OiL at $100 per Barrel - It's a Reality
Jean-Maxime would like to point out that there's a case to be made for OIL at $100 a barrel. He says, "I knew three years ago we were going to see higher oil prices. $75 a barrel is a given. Higher oil prices are going the be the norm for a while. The prices of the past years were artificial. Heavy demands are constant now, particularly from India & China. They are now competing for raw materials / commodities across the board, driven prices up."
So what's that got to with real estate? Everything. The cost of operating properties is going to continue to rise. You can pass these costs to your tenants, but you will see the reflection of increases in your bottom line as well. The market will only bear so much. Calculate what oil at $100 will do to your bottom line before investing and when considering what to sell.
Also consider what will replace oil. Natural gas, solar, hydro, and other options begin to be very competitive when oil hits $65 a barrel. We're there, people. Time to see what retrofitting will be needed in your properties to take advantage of cheaper energy options.
