Anyone who has been around long enough knows the answer to this old trick question. The answer is of course…
It’s always the right time to buy property!
Consider the following scenario’s.
SCENARIO 1: The market is booming!
- “I might pay too much and then the market will fall right when I’ve bought at the top!” True, the market could tank and you could lose 10 – 20% in a year. But then when do you buy? Can you pick the bottom of the market too? Since property generally moves in 7 – 8 year cycles, you have a long wait ahead. Add up all the years of dead rent money (if you’re buying to occupy), or the lost rental income (if you’re buying for investment). 8 years of renting, moving, inspections etc… just so you don’t lose a few grand and get to say you weren’t suckered into buying at the top. Go ahead, add up your dead rent money plus a few hours a day – at your rate per hour – for all the frustration you feel over 8 years of missing out and let me know what the number is? Fair chance it’s a bit more than the loss you might have avoided.
- I remember in the 1980’s when you could buy an average house well under $80,000 (depending on which part of the world you were in). That was at the ‘top of the market’ too. Yet here we are today, and the average home is around 7 – 10 times that price (again, depending on where you live). If you are always fearful and trying to ‘time-the-market’, you might have to get used to sitting by and watching others get rich. Just buy and hold. It’s worked for so many of the wealthiest people that it’s beyond debate. We have clients who have held the same properties through real estate busts and 16% bank interest rates. They not only survived, but generally thrived because when the market bounces back, it does so with a vengeance!
Scenario 2: The market is falling!
- “It’s not at the bottom yet, I still might pay too much!” True, the market could have further to go and someone else might buy cheaper than you did in the next few months. Friends, that’s just your ego talking. What if you’d paid $85,000 back in that 1980’s boom market? Would you still be beating yourself up for that extra $5,000 you paid today? Highly unlikely. In fact, if you’re honest, you’d probably wish you could go back and buy 10 houses!
- Look how much I saved since it was at the top! I don’t know where the bottom is, but I’m really happy I’ve bought well. When the market does turn up again, I’m here, I’m in the market and I’ll be part of the next boom! So as the old saying goes; “It’s always the right time to buy property.”
There is another approach in both the stock market and the real estate market. Put simply, it comes down to this; ‘timing the market‘ versus ‘time in the market‘. Over the past 30 years I can honestly say I’ve seen great successes with both. My first house nearly tripled in value in 5 years. That’s the power (and luck) of ‘timing the market. But far and away, those who are extremely wealthy property owners today are nearly always those who have spent a long ‘time in the market‘. Buy your property well, and hold it forever! Do this, and the odds are in your favour to sail through any boom and bust property cycle.
Timing is great, so is winning Lotto! But time in the market, is a winning strategy in property, so get into it now!