The best time to buy property was many years ago when prices were much lower. The second best time is NOW! You obviously can’t buy property in the past, but there is also no need to wait for the future, when there are always so many opportunities in the present. All you need to do is to find them and to take action to make best use of them.
If on a macro level you look at how property prices have developed over the last decades, you will find that in many markets and regions, prices might have doubled or multiplied even more than that. There are major distortions like the World Wars, the oil crisis in the ‘70s and the Global Financial Crisis in 2007-2008. But as I mentioned already, in bad times you can make as much, if not more money with property, compared to good times. Essential is your ability to find and acquire the right property that suits your strategy and that can be done any time, all the time. So the best time to buy property is now!
On a micro level, property prices have a tendency to move in cycles of about seven to ten years. Likely the bottom during a downturn will not be as low as the previous bottom, but the peak will be higher than the previous peak.
The good news is that at any point in time, there will be some areas or market segments that are in a downtrend and some that will be in an uptrend. For example, house prices in Hong Kong might be rising fast, while at the same time they are declining in Singapore. Or, within Sydney, prices of one-to-two bedroom apartments are rising at the same time that prices of luxury villas are declining. In most markets there is an abundance of information available from websites and relevant government authorities that show data of transaction volume and prices, where you can
determine where in the cycle a particular area and market segment is in currently.
A Team Sport
Property investing is a “team sport”. If you try to do everything yourself, you will soon find that you might not have sufficient detailed knowledge and you also might run out of time. So involve the right people to help you. If you bought a property before, perhaps your own home, you would have at least involved a property agent and a lawyer. Who are the people that you need on your team? In fact, you might probably want more than one team, one core team to help you with tasks that relate to your overall property portfolio, and a local team to help you with localized tasks. If you are investing in multiple different areas, you should have one local team in each area. Here is my recommendation on whom you should put on your teams:
- Lawyer / Solicitor
- Mortgage Broker
- Insurance Broker
- Accountant / Book Keeper
- Tax Advisor
- Architect / Interior Designer
Local Team (area specific)
- Sourcing Agents
- Estate Agents / Property Agents (buy / sell)
- Letting agents (rent out)
Most terms you are familiar with, perhaps with the exception of sourcing agent as it is not an official term. With sourcing agents, we mean property agents who don’t cover the entire market, but have specialized in finding good deals. For example, below market value properties for you, against a fee. Communicate with your teams on a regular basis to build a good relationship, even if at the moment you might not be planning a new property purchase.
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