Investors Dont Ride the Real Estate Market Wave
rising market and avoid the sinking one, and you are sure to be a successful
investor. While that is not entirely false, it is certainly misleading.
Yes, you can make money in real estate by timing your investments and
sales with the valleys and peaks (respectively) of the market conditions.
With this paradigm, anybody can make money in a rising economy, but
the successful investors are the ones who know how to sustain their
business during the toughest economic times.
Instead
of waiting for the perfect moment in market-time to strike, the successful
investor will scour the deflated market for good deals. That is
the trick: invest in good individual deals, not in a rising market.
You might think, “Even a great deal will yield only a relatively small
profit in a bad economy, so why not just wait for a huge profit at the
right time?â€. Well, in theory, you would be right. It
is harder to make money when people aren’t spending money on what
you have to offer. And yes, selling at a market peak is the smartest
and most lucrative way to profit. However, most investors have
no clue what the market is going to do and when. They may listen
to what the experts tell them, but the experts have demonstrated recently
that nobody can really manage all of the parameters well enough to reliably
predict such a complex market.
The
point is, clearly, investing at the right time is better than investing
at the wrong time. But putting all your eggs in the market timing
basket is incredibly risky, because we don’t have a reliable sense
of what will happen ten minutes in the future, let alone ten years.
Instead, search your prospective real estate investments property by
property, deal by deal. Pay attention to the current market conditions
(as they will regulate how you make your money), but don’t become
stagnant in difficult times or overly excited in prosperous times.
The key is to slowly but surely accumulate good deals and capitalize
when you find them. People will always need homes, even when the
community or country as a whole is suffering. And everyone wants
the best deal they can find. Why not simply find it first and
then provide it for them?
Tell us what you think.
We would love to know. J
InvestmentPropertyMadeEasy.com
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