There is no market that’s perfect for investing. It tends to be more difficult to find bargains in rising markets because if the market keeps rising, the probability of selling the property quickly for a large profit increases. In contrast, when property values are falling, more so-called bargains become available. Yet you need to assess the true value of these properties based on when you expect to sell the property. So your purchase must be made at a steep discount to allow for a profitable sale later.
Become educated in your local market first by understanding the trends. Learn about target neighborhoods, enlisting the aid of successful real estate professionals along the way. These professionals will help interpret market indicators, such as the average length of time houses are sitting on the market this month versus last month or last year. Armed with this type of information, you will be able to make good decisions.
Investors know that a weak market can offer extraordinary deals, though flippers need to proceed with caution. In a falling market, even a few months’ delay can turn a sound deal into a headache. It always pays to know the market and purchase the property at a price low enough to net a profit, even if the market continues to fall.
More important than guessing the future of a local market, you need to have a clear plan in mind when purchasing property. A smart investor knows exactly how he will exit the property before he buys. An even smarter investor will have a backup plan or two, in case the first course of action doesn't work. In short, know your market and your plan before you begin to invest.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125