Why There is No “Perfect” Time to Invest in Real Estate

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There are literally thousands of people sitting around at home, or at work, dreaming about investing in real estate. Each of these people has a good reason not to get into real estate. Many believe they don’t have enough money to get started. Others don’t think the market is ready, or that they don’t have the spare time to invest in real estate. Some are waiting to quit their full-time job first. 

There’s always a reason not to get started in real estate. Beginning as a real estate investor can be overwhelming. What’s important to remember, is that there is never a “perfect” time to start investing in real estate, so you might as well get started right now. 

The Market is Always Changing

A suburban neighborhood

While it’s impossible to predict the future, one thing we can all be certain of is that the real estate market is destined to change over time, which means that real estate investing comes with some uncertainty. Since the mortgage bubble crash in ’07 the market has gone through dramatic changes. 

Just after the 2007-2008 mortgage crisis, houses began to flood the market, dropping values down dramatically. It was an ideal time to be a buyer if you were brave enough to invest and you had the cash for these properties. The market continued to fall and seem uncertain until about 2013 when conditions stabilized and prices began to climb more predictably once again. 

Today, we’re in more of a seller’s market, even with the instability caused by our current pandemic, houses are still getting offers and commanding impressive prices. That doesn’t mean you shouldn’t purchase real estate currently, my point is that the market won’t sit still. Supply and demand levels will always change and prices along with them. If you wait for perfect buying conditions, you could end up missing out on serious opportunities. Stop worrying about the state of the overall market, and start looking for local deals that have potential in the housing market near you. 

Nobody Can Predict Interest Rates

Loan documents

Just as you’re about the pull the trigger on your first property, it’s tempting to have second thoughts. One of the most common concerns new buyers have is whether they are getting a good interest rate or not. Interest rates fluctuate over time, and it’s nearly impossible to predict whether they will move up or down in the future. That’s why it’s a poor strategy to try and wait for mortgage rates to drop down before making your investment. 

Currently, 15-year fixed-rate mortgages can be had with interest rates of less than 3%, and it’s not uncommon to get a 30-year fixed-rate mortgage with a rate of less than 4%. While it’s possible for these rates to drop to an even lower level, that’s impossible to predict, and not really worth waiting for either. 

Unless you’re looking at an uncommonly high interest rate when going for a mortgage, it doesn’t make sense to try and wait for a lower rate because it all comes down to the actual numbers to make that determination of a good investment. Your time is better spent searching for property deals and becoming a landlord so you can begin earning on your investments. You’ll start earning the first year you invest in real estate. 

Real Estate isn’t a Fad

Decorative Bitcoin coin

Fads have the potential to make investors very rich or to bankrupt them depending on when they buy and sell. A great example of this is Bitcoin. Investors that purchased the coin early were able to exponentially increase their wealth just a few years later. Bitcoin prices are highly volatile though, and some investors that got in later saw the value of their holdings slashed in half or worse. 

Investing in a fad product is risky, but it has the potential to pay off in a big way if you are lucky enough. Real estate isn’t a fad. People will always need a place to live, which means that when you buy and sell your first property isn’t critical. Sure, you can earn more money on your investment if property values skyrocket in the neighborhood you buy in. But, you can earn profits even when property values drop, or when they stay the same. 

As a real estate investor, you’ll enjoy tax breaks every year. As a landlord, you’ll also be increasing your wealth each month as your tenants pay off your loans and generate equity for you. Short-term value decreases aren’t a huge issue, and you can continue to generate wealth by holding your investments over the long-term. That’s why it makes sense to invest in real estate, rather than waiting for perfect conditions. 

Conclusion: Stop Waiting and Make Your First Deal

Deciding to invest in real estate can be overwhelming and at times, scary. And every investor has his share of buyer’s remorse but waiting for the “perfect” time to make your move is a poor strategy. Time will work against you. There are too many variables to track and too many opportunities for you to earn wealth right now. Stay calm, work with experts, and search to buy good deals right now. If you’re patient with your investments you should be able to generate wealth with them even if the market conditions aren’t the best they could be. 

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