There’s been a dramatic increase in the number of so-called ‘experts’ hitting my email inbox recently. I’ve never heard of them. However, they’re making unbelievable claims about their ability to help me get rich quick. They’re people whose track record seems to consist of a recently created web presence. They have no credible background whatsoever. They think it’s a safe bet for them to strut their stuff because prices have been rising in most areas and interest rates are at record lows.
And they think it’s a safe bet for them to strut their stuff because prices have been rising in most areas and interest rates are at record lows.
But if the market turns from growth to stagnation or decline, what happens? These overnight sensations quietly disappear from public view. They hand the stage back to the real experts who have been in the business longer. They’re experts who can offer investment solutions that work even when there’s no overall growth.
Why Does This Happen?
This occurs because the housing market goes through many different stages. And it offers investors many different and, sometimes, highly complex investment strategies. It’s this diversity that enables experts and educators to concentrate on just one strategy which they can then promote as being effective at a particular point in time.
In markets with low to no growth, investors can renovate or develop to create their own wealth. In areas with erratic growth, they can find potential hot spots. When growth is at its highest, investors can flip or trade. They can even buy properties off the plan with the expectation of quick and certain profits.
But what happens in areas where prices are falling, or at times of rapidly rising interest rates and tight housing finance and falling prices? This is where you can find stressed areas where growth is likely to return so that you can buy bargains when prices are at their lowest.
The Role Of The Property Investment Strategy Cycle
Each of these strategies is very different. And while they’ll fail at the wrong time, they will certainly work at the right time. This is true for almost all the strategies available to investors.
There are, however, some lessons we can learn from the property investment strategy cycle. The most important of them is that it’s essential to use the strategy most suited to the conditions prevailing in your part of the market.
Property investment is the most expensive form of investment there is. You’re fortunate to have many experienced advisors and mentors you can rely on. These are people who have been in the business for many years. The stakes are far too high to be entrusted to some fly-by-night operator who will disappear back into the woodwork as soon as conditions change.
