How important is timing the property markets? – by Michael Yardney
Is it too late to get into this property cycle?
Our property markets have performed strongly for a few years, but have now slowed down leaving many investors wondering is it too late this time round – have they missed the boat this property cycle?
I understand why they they’re thinking this way.
It’s probably because it’s often said that timing is everything when investing, but I’ll let you in on a little secret – that’s not really the case.
Timing is one of the most misunderstood concepts with regard to investing.
The truth is successful investors know how to create wealth at any point in a cycle.
Timing definitely matters.
Of course you don’t want to buy a property at the peak of the property boom, just to wait three or four years before its value starts to rise again.
But successful investors find that timing isn’t really that important.
Have you noticed how some investors seem to do well in good times and do even better in bad times?
Market timing isn’t really important to them?
On the other hand others do poorly in good times and even worse in bad times?
Market timing seems to have very little effect on them either.
Interesting isn’t it?
So what is it that differentiates that small group of successful investors from the crowd?
The fact that successful investors manage to make money while unsuccessful investors lose money at the same stage of the property cycle suggests that’s it’s not our external world that determines whether we make or lose money, it’s something inside us.
Many would argue that it’s knowledge, but I don’t think that’s quite right.
Sure they may have a level of knowledge and financial fluency that the average investor lacks; yet knowledge alone doesn’t make them successful investors.
What allows some people to become super successful investors is their mindset -the way they think about money and wealth
In his book, A Tale of Two Cities, Charles Dickens famously wrote: “It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness.”
Amazingly things haven’t changed much since Dickens wrote that in 1859.
For some people the current stage of the property cycle makes these the best of times. For savvy investors the current times are an opportunity to buy top class property assets that will help them set up their financial independence in the future. These people see abundance.
For others, these are the worst of times.
Some only see the negatives in the media – property prices at record highs – lower capital growth or unemployment is climbing.
Or maybe they’re saddled with investment debt secured against the wrong type of investment such as a property in one of the mining towns or regional centres where values plummeted.
Or they have consumer debt that they are struggling to pay off.
These people don’t see the available opportunities, they don’t see abundance. They see scarcity and they feel fear.
You’ll need more than knowledge and facts
As I explained, knowledge alone won’t assure your success… I’ve seen some very knowledgeable people make some foolish investment decisions.
Interestingly while some investors are currently getting in the game and buying great investment properties to help secure their financial future, others are waiting for the timing to be perfect.
Only yesterday I spoke with David who had been waiting for over 10 years for the timing to be ‘just right’ to start investing in property.
The timing will never be ‘just right.’
There will always be challenges, situations, circumstances, obstacles, fears, doubts and things that you are going to have to overcome. The timing is never going to be perfect.
Ten years ago David saw some obstacles and didn’t get into property investment.
If he did, chances are that wherever he bought his property it would have doubled in value by now, even if he had made a mistake and paid a little bit too much or bought in the wrong street.
Wealth is attracted to people who are decisiveness and committed. If you are waiting for the timing to be perfect – the timing will never be perfect to you.
Currently property investors are being some great opportunities to buy properties as the heat of the last few years has come out of the market.
Personally I’ve added substantially to my property portfolio over the last few months.
As I did last year and interstingly the year before.
I’m not worried about timing or the current stage of the property cycle.
The list is long of wealthy Australian property investors who sewed the seeds of their portfolio with “remarkably poor timing” at the advanced stage of the last big property cycle in 2007 and 2008 as well as those who invested in 2003 -4 11 and it was much the same in the early 90’s.
These successful investors were busy doing while others were pondering.
Yes, we’re moving into the next stage of the property cycle and seems some major changes in the economic landscape.
While the timing might seem unfavourable to some property investors right now, others are going to do very well over the next few years. That’s the way it always has been.
I’m certain five years from now, there will be a group of successful property investors who will tell stories of buying properties when everyone advised them not to, when everything seemed difficult, when the media was very negative – right now.
Michael Yardney is CEO of Metropole Property Strategists who create wealth for their clients through independent and unbiased property advice and advocacy www.metropole.com.au
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.