The Right Time to Invest in Property?

Many clients ask us "When is the right time to invest in property?"

Real estate generally moves in cycles. It is now widely accepted in Australia that property doubles every 7 - 10 years. Cycles generally involve rising or falling interest rates, stagnating or rising property values, inflation and changing population demographics.

So when is the right time to buy? You should always remember that waiting for the right time to buy property is not nearly as important as keeping it for the long term. Your philosophy should be to buy property at any time that you can afford, and hang onto it. With a long term holding strategy, timing the purchase is not as crucial.

The important issues are these:

1. Set up an appropriate financial plan - tying your unique hopes and goals to your unique personal, financial and career commitments.

2. Acquire the right investment - investors need to obtain a balance between:
  • returns - income and capital gains;
  • security - balanced risk; and
  • flexibility - essential if there are changes in the economy or personal circumstances so the investor can re-organise their affairs reasonably quickly without having a "fire sale".
3. Give it time - Traders buy and sell in the hope of making a short term gain. True investors buy and hold and benefit from a steady appreciation in capital value, from regular income and from increases in returns over time.

For the true investor, any time is the right time to buy investment property.

By David Maynard
CEO My Tax Zone

Copyright 2014. My Tax Zone.