Some of this may sound too obvious or simple but you’d be surprised by how many people get it wrong.
The most basic rule in Real Estate in my opinion is the ‘buy at the bottom and sell at the top’ philosophy. It may sound overly simple but, you want to buy an Investment property when prices are down and get in while the market is slow, this is normally referred to the bottom of a property cycle. To me anyway, when the property market is quiet and there are lots of properties to choose from, you’re in a strong position to negotiate and get the ‘most feasible’ deal.
Unfortunately a great deal of Investors wait until their friends are doing something or the news articles come out, by which time the market and house prices are moving upwards again so the benefits are not so great.
Here in Western Australia property values normally double every 7 to 10 years statistically. You can check this yourself through places like REIWA or the Bureau of Statistics.
Property values will go up and down along the way and not all property cycles will be the same but it’s a pretty good guideline in my opinion.
Maybe your next question is “what do we do between cycles?” To me the simplest thing is to diversify your portfolio. What I mean by this is there are property cycles all over the country and they’re all different so there are most likely opportunities elsewhere if the market isn’t conducive where you currently live. I’m a mortgage Broker so my opinions on buying property are obviously biased but there is plenty of information, seminars, research you can do to be comfortable with your own decisions.
Ideally if you have enough equity in your home, you don’t need to use any savings so financing there properties can be quite straight forward. Obviously as part of the process, you will want to talk to your Accountant and preferably a good Financial Planner too so you can make a well informed decision about your possible purchase. Lets’ “do it right once” as they say.
In the end you do what’s right for you, but hopefully this has helped your overall picture of the possibilities.