When it’s the right time to buy your next investment property?
One of the things I constantly see as a property investment strategist is investors who have missed out on a great opportunity because they were so consumed with timing the markets, they forgot to actually take the plunge and buy something.
Generally, these investors become obsessed with the idea of buying right at the bottom of a property cycle so they can secure a “bargain”.
They wait and watch and when they start hearing talk in the media about a market slowdown or impending crash, they think:
“Ah ha, now is the time to make my move! Or is it?”
You see, this type of investor becomes so determined to get the best possible deal that they are never quite sure if prices could go just that little bit lower; so they wait.
Of course by the time they realise they should make a move, the so-called “bargains” have come and gone and the market is moving onward and upward again.
But that doesn't seem to change their behaviour.
And as the property cycle moved on, so too did the waiting game played by these would-be investors.
Is there a best time to buy property?
While timing of the markets is important to some degree, it is definitely not the key to investment success.
There’s a saying in property circles that goes.
“When was the best time to buy property? 20 years ago! When is the second best time - today!”
In other words, you buy when you can afford to and when you are ready to.
Yet many people are concerned that affordability is just too much of an issue right now to get into property investing.
We all hear about it constantly in the media – the issues with the rising cost of housing and the property bubble that’s about to burst.
I’m certain this has caused many potential investors to sit on their hands and wait to see what happens.
I’m also certain that many of these potential investors will kick themselves in about five year’s time for not taking the plunge this year.
I’m not suggesting that you should run off and buy any old property at any point in the property cycle just because you have some extra funds lying around.
Far from it.
The take home message is that while the property market undeniably has its ups and downs, well located, highly sought after property rarely declines significantly in value over the long term…and property investment is all about the capital growth you can achieve over the long term.
So yes, there will be times when your investment only grows in value less than 5% per annum, but there will also be times where it skyrockets by 10% plus.
How the property markets work
Now I’m not suggesting that market timing isn’t something you need to consider as an investor.
In fact, I think the more knowledgeable you are about how the property markets work, the better prepared you will be and the higher your chance of creating significant wealth.
But while it’s natural to be cautious and while you should carefully assess your own personal position when it comes to your capacity to invest, you should also remember that with risk comes reward.
There will never be the perfect time or the perfect property – you simply will not find either.
But procrastination does not equal profit.
Don’t let the question of timing or the fear and doubt that can come with taking the plunge into property, be your undoing.
Sure there are risks involved – as with all investing – but these can be minimised with the right type of research, financial planning, goal setting and of course, advice from experienced and independent experts.
If you take the approach to property investment of slow and steady wins the race. In other words, if you are in it for the long haul and not just to make a quick buck, then when you buy won’t be as important as what you buy.
If you’re willing to sit on your property purchase for the medium to long term and buy in tried and tested areas that provide consistent, proven, above average capital growth you’ll win the game every time.
And in particular look for areas where there are multiple growth drivers that will ensure continued long term capital growth.
Drivers such as gentrification, employment growth, population growth in an area where there is limited supply and major infrastructure changes.
If you want to get the best deal when you buy your next investment property, why not get a professional property strategist and buyer's agent on your side working for you.
