At Global Investments we’ve been involved in the property market for many years. While some things change and move with the times, we still hear the same age old questions on a regular basis: “When should I buy? What is the right time to buy? When do I know that market conditions are right?”
Understandably, investors around the world are often focused on purchasing properties that are competitively priced and with great potential for yielding returns.
While I think that these are of course great questions, the truth is that they aren’t all that easy to answer. And that’s because real estate is rarely black and white. There aren’t times when it’s a clear buyer’s market vs times when it’s not.
There are many factors at play in this type of investment decision. It can depend on what type of property and what price point you are looking at, for instance. It also depends on your own situation as an investor.
In broad terms, we can say that when the economy is bad and markets are down, things become trickier for those investors who are reliant on finance. For instance, we know that interest rates and inflation are currently high, accompanied by a cost of living crisis.
Yet for investors who have cash at hand, this is a time of great opportunity. Whether it’s a $50,000USD property or a $1 million USD property, there are sellers in the market looking to free up funds – and this means that many of our investors are able to access well-priced stock in desirable parts of the USA.
I think that right now is a great time to buy low-cost investment properties like the ones that we sell. But I would also argue that any time cam be the right time to buy. If you think about it, in a really bad year property prices might come down by a maximum of 10%. This is almost unheard of and would be a very rare occurrence. But let’s say this is the case: and we take for example a property for $80k USD.
Let’s say you wait a year for the market to drop by that 10%. You save $8,000 on the purchase price. However if you don’t wait and jump straight in today you begin earning rental income immediately.
Let’s say that rental figure is $1,100 per month on the $80k property. That generates an income of $13,200 over the course of that first year – significantly more than the $8,000 saving made by waiting 12 months for the property market to drop.
And what if it doesn’t drop over the course of that 12 months? Would the cautious investor wait another year and lose another year’s income?
In over 10 years of selling houses in the USA I have come across some great investors and very nice clients. Some of whom have still never purchased or taken the plunge, even though we have been speaking to us for years. Their objection is always the same: “Oh maybe the prices will drop some more or maybe there will be a better house around the corner.” Yet years later they could have purchased and earned a steady, lucrative income and also an upside on the price and gained some equity.
Of course, it is important to find the right property at the right price. I’m not suggesting that any investment is a good investment. What I would argue, however, is that when it comes to low cost investment properties in any country, the best time to invest is YESTERDAY – or, at the very least, TODAY!
SOME OF THE GREATEST INVESTMENT QUOTES CAN COME TO MIND.
- WAIT AND BUY REAL ESTATE? OR BUY REAL ESTATE AND WAIT
- TIME IN THE MARKET IS BETTER THAN TIMING THE MARKET
- YOU CAN NEVER LOSE MONEY IN REAL ESTATE, ONLY SELL AT THE WRONG TIME.
