Investing in property can be one of the safest investments you ever make. It can also be one of the stupidest investments. Knowing when the time (and the location) is right to invest is vital before you make a move. There is a lot to consider before investing in the property market. If you buy at the wrong time then, your investment will be a gamble and, as with most gambling, it is not likely to pay off.
Only the naive jump into an investment without doing their research first. You must never buy a property on a whim. Just because a property seems cheap, that is no reason to buy it right away. Think about it – why is the property so reasonable? What are the potential flaws of investing now, in this area?
If you are considering investing, but aren’t sure whether the time is right read on. There are a few things you should look into before you do anything.
Will You Rent Or Sell?
Much of your decision will depend on what you intend to do with your property. Do you intend to sell it on immediately and make a quick profit? Or are you going to rent out the property to make yourself a steady income? You should have an action plan in place before you buy a property, so that you know what you will do once you have bought a house.
Once you know which you intend to do, you can start to decide when the right time to invest is and opt when to make a move. If you are looking to rent out property, you should choose a period when there is a property boom, as few people buy properties then. If you want to sell the property, then you should choose a time when the market is at its lowest, so you can ensure you make a profit.
Know The Cycle
Luckily for you, the housing market works in a period of cycles. By watching what the market is doing, you can predict what it is likely to do in the future. Of course, no predictions are 100% accurate, but by keeping an eye on how things develop you can get a good idea of what will happen next.
The market works in three major stages. The first stage is the boom; that is when the market is at its highest and most-expensive point. Next comes the slump. The slump can be large or small, but will follow a boom. Lastly, comes the recovery. The recovery is the most-important part of the cycle. If you want to buy and then sell a property, you should buy at the start of the recovery stage. Recovery means that the market will peak in a matter of months. Buy up all the property that you can afford now and then sell in the boom.
It is important to know when to spot the recovery stage. When the property market begins to pick up, you need to buy and fast. For example, when estate agents in Bingham report that houses are beginning to sell for more money, you need to jump into the market. At this point, it is vital that you don’t hesitate, or you might miss the recovery stage.
The Market Changes Region By Region
These rules don’t apply on a national level. The cycle may differ depending on the region and the economic market in the area. You must never assume that the property market is the same all over the country or even all over the world. Take the time to look into different regions and learn about their cycles. Some regions may never peak in the property market because the area is not wealthy, and there are no job prospects.
If you just buy in one region, then it is simple to keep up with the market. If you are operating on a more national level, then you will need to hire a market expert to help you decide when to buy in different areas.