Why Timing the Real Estate Market Rarely Works Out
Summarized from Realty Times. See the complete article.
Even if you aren't an investor, you can make a lot of passive income from your vacation rental properties and benefit from long-term appreciation even if it's a second home. You stand to benefit even more if you can time the real estate market appropriately, taking advantage of low prices when buying properties and taking advantage of high prices when selling them.
But the truth is, trying to time the real estate market rarely works out in a person's favor.
Why is this the case?
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The Idea of Timing the Market
According to Eddie Garcia of Estate.co, “it's certainly easy to understand why timing the real estate market is such an attractive idea. As investors, we always want to buy low and sell high, making the biggest possible profit in the process. But if real estate investing were that easy, everyone would be a billionaire by now.”
Conceptually, there's nothing wrong with trying to time the market. It's a good motivation to try and buy assets at the lowest possible price, while selling them at the highest possible price. But in practice, this isn't such a simple maneuver to pull off.
These are just some of the reasons why timing the real estate market rarely works out for the people who try it:
• The real estate market is complicated
• Fluctuations are unpredictable
• Neighborhoods vary
• There are always opportunities
• There are strengths and weaknesses in every environment
• A steady approach mitigates risk
• People are emotional and unobjective
There's nothing wrong with trying to figure out what the market is doing and where it's headed. There's also nothing wrong with trying to take advantage of high prices via selling and low prices via buying. But if your entire strategy revolves around timing the market perfectly, you're setting yourself up for failure. For most investors, it's much better to take a more high-level, long-term view.
They always say don't wait to buy real estate, buy real estate and wait. Call me now and let's get you building future equity.