Let's see, life if not that simple, but if you look carefully, you will find gold. Actually you don't need to look so hard anymore; gold in real estate investing is now everywhere.
Before I tell you why and before you think I am mad, which occasionally - lets' face it - we all are, let us look at some facts.
When I talk about real estate investors, I mean people who buy property to let it to tenants for the purpose of long term holding. If one holds property for a short time the tax man will tax them as income if they sell. This means they are not investors at all, but speculators or trade in real estate at the most.
People who hold property for a long period of time, lets say over 5 years and often for the term of the mortgage bond, I call "investors" for the purpose of this article.
Either way, if you look at real estate investors that invest for the long term, which are true investors, not speculators, the last interest rate increase and the many before this one have created the perfect market for them.
Seasoned real estate investors don't buy into property at high prices to sell it quick, or buy at high prices any time what so ever. The numbers must make sense. In high priced markets and boom times - the numbers never make sense, because the rental return and yields on the real estate are so low, that such investors have better things to do with their money.
Therefore due to prices dropping since the interest rates started increasing investors started looking closer at increasing a sustainable portfolio. But at the beginning of interest rate increases sellers still wanted high prices and they wouldn't budge. With further interest rates increases prices started dropping more and more; and now with the latest increase I think the perfect market conditions have been created. There was no better time to invest in real estate.
Bargains are more than plenty and prices are sustainable into the future for holding and for passive income. The perfect market is when investors buy property that will increase wealth for the long term and create a good portfolio at the right prices that is sustainable.
Of course, people that bought a lot of real estate in the boom, which was far from the perfect time to buy, have no more affordability or even worse are close to or being repossessed. Not good, nonetheless, if you tried to tell them at that time they are buying to high, they would laugh at you, everyone was buying, how could you not buy?
Experienced real estate investors knew that you could not buy if the numbers do not make sense and therefore they waited for the right opportunities.
I believe the market has been good for buyers for a while now, but with the latest increase in interest rates - it just became PERFECT.
So, if you are looking for a perfect timing to build wealth with real estate you won't find a better time for a long while, use this time while it lasts and then you can sit back and relax and just strengthen you letting business to manage all the properties you bought.
Yes, it sounds easy, but quite frankly if planned correctly and with the correct strategy, it is easy.
Sean Wheller is a real estate agent, investor and the founder of the largest online
realestate investing education website in South Africa that specializes in
real estate training, and
property investment courses and seminars.
