As a new year approaches, no doubt the fire of ambition will be lit in many of us. Whether you're thinking about investing in real estate for the first time or have in you a desire to expand your portfolio, there is always some level of anxiety that can come with buying property. No matter how you invest in real estate, there tends to be this apprehension about whether or not the timing is right.
Because our investment mind often thinks of real estate investing in the same terms of stock investments, and we know that real estate also moves in cycles, we can find ourselves worrying a lot about timing. Is this the right time to invest? What if I jump in at the wrong time?
These questions can plague real estate investors, especially those without a lot of experience.
So here's the question: does timing really matter in real estate investment?
4 Factors to Consider in Timing Your Real Estate Investments
What's your strategy?
For the real estate investor, how much stock you put in the timing of the real estate market depends a lot on your strategy as an investor. For example, if you are a buy-and-hold investor looking predominantly to long-term investments, the most you will likely look for is to buy in a buyer's market. Entering in at the right time, otherwise, doesn't matter since much as you aren't planning to sell any time soon.
For a flipper, however, timing is more valuable as they need to be able to both score a great deal on a property (where, arguably, the profit is truly made) while also being able to sell the property after the renovation is completed.
Depending on what you're looking for in a market, one man's passe market may yield opportunities for another.
Markets matter, but they are not everything.
When looking at a market, there are tiers of value to consider. At the top of the pyramid is your property, followed by its neighborhood, then its local market, then the national market. This is how your individual property, in very simplified terms, is effected. The local market most directly impacts the property, but sometimes your success is a lot less about market conditions and more about your portfolio overall and the properties within it.
What do we mean?
As a turnkey investor, are you providing quality services that keep your tenant retention high and secure your cash flow? Are you ensuring the maintenance and quality of your property over time so that it increases in value? Maximize your opportunity regardless of the circumstances around your properties. That means being diligent, working with the right people, doing your research, and mitigating your risk.
In many cases, your ability to expertly manage your investments—either by your own hand or through excellent teams—is what allows your success to transcend market conditions.
If you are always waiting, you're wasting time.
Time is a valuable asset in this business. As an investor, if you can maximize the time you have to grow and scale your portfolio, you will have a distinct advantage. If you spend a lot of time worrying about when the market conditions are most in your favor versus buying into investment opportunities that you have, through diligence and research, found to be sound investments, you will likely lose in the long run. While your rate of return is ultimately more important than when you start, wasting time hurts.
If you're waiting to start because of the market, you are prolonging the time you could be spending working towards your best financial future. Be diligent, do your research, but don't wait out of fear.
Turnkey investing removes the need for perfect timing.
While the timing may be a valuable element in some forms of investing, there is no need to time turnkey real estate investing. Because your turnkey company has already purchased the properties at the best prices possible, there are no worries about getting in on a buyer's market. If you've done your due diligence, you know you're working with a company you can trust—someone who has carefully vetted and researched their markets for opportunities and promise of growth and future returns.
There is no need to time turnkey investing because you will be working closely with the experts who have already perfected it to a fine science. If you feel anxiety about jumping into the world of real estate investment, you can rest easy knowing that the experts and advisers at Memphis Invest know our markets, our properties and the portfolios our investors are building inside and out.
It's the expertise that makes the timing right every time.
Talk to the advisors who know how to build the turnkey portfolio that suits your ambitions for excellence.