There are many people out there that are waiting for exactly the right time to buy a property; the optimal time to buy a property. They will either wait until everyone else begins buying or they will wait and wait and ultimately do nothing. Either way, both of those strategies are silly. Here’s why.
Why You Shouldn’t Be Buying When Everyone Else Is
The fear of missing out is a powerful form of pressure. If your friends are telling you it’s the right time and the media is telling you it’s the right time, chances are your fear of missing out will mean your buy is overpriced or an inferior purchase. When you buy at the same time as everyone else, all you are doing is pushing up the value of properties.
On the other hand, buying nothing at all won’t do much for you either. If you are wanting to improve your financial situation you are going to have to get over your analysis paralysis and actually take the next step. You know, actually buy something.
Alright, So When Is the Right Time to Buy?
While the two examples above might seem far-fetched to you, they do in fact represent a large majority of Australians. They either buy at the wrong time or don’t buy at all.
If you want to be in the minority of people that buy right, you need to understand what savvy property investors already know. That is that the best time to buy is when you can afford to do so, regardless of the market conditions.
If you have hit the brakes after reading that, here us out. It may sound counter-intuitive to what we just finished telling you, which is to not buy at the peak of the market when everyone else is so that you don’t overpay. However, a smart and experienced property investor knows that around the country capital city markets are experiencing different conditions at the same time. Which means, it might not be the right time to buy in your back yard, but it could be the perfect time to buy in another location with the right property market.
Picking the Moment Just Before the Market is Going to Strengthen
There are far too many buyers that devote far too much time to trying to perfectly time the market. That is, they try to pick the exact right moment to buy just before everything is going to strengthen. But, the truth is, unless you are a property investment expert you are probably going to get this wrong. Honestly, even the experts get it wrong more often than they get it right.
When you hear about market timing as an investment strategy, most people don’t really understand what they are talking about. Most of these people have confused market timing with time in the market. This is because, it is always the ability to hold property long-term that produces the best results.
In Summary, The Best Time is Right Now
You can add value to a home in order to make money when you buy, but this profit will always be dwarfed by the capital growth achievable by long-term holding of a property. As a general rule, most property portfolios won’t see significant capital growth until their properties hit the 10-year mark.
If you have held on to your property investment for 10 years, the market conditions you bought it in will be a very distant memory. And, not to worry, even 10 years from now there will still be plenty of people waiting on the sidelines thinking that there is a perfect time to buy. Don’t be one of them.