Is now a good time to invest in property?
This is one of the top reasons used by ‘potential’ investors for not taking action in our opinion… ‘Is now the right time?’ This is not being disrespectful in any sense. There is some truth in the fact that you do need to be mindful of where the property cycle is when purchasing any property, but there is never a perfect time to invest. It does however, all depend on your goals, the strategy you are taking and the term of your investment (short-term, or long-term). As we always state, we view property as a long-term investment, and as a result we are always positive over the long-term that property is a good investment.
The saying ‘never catch a falling knife’ is true. If the market is visibly turning, and prices are falling then naturally it does make you have to work that bit harder to find a good investment property. This is equally true when prices are on the rise, as it can be hard to secure a good investment when properties are selling quickly and demand is high. So, there is never a perfect time to invest, and waiting for a perfect time will mean you miss out on a lot of opportunities.
As we shared in our ‘Top 10 tips for getting started in property investing’ it is all about understanding your goals, developing a strategy and making sure you do your own research. If you do your research you will have better knowledge of the area you are investing in, the type of property that you are looking to purchase and the past and present prices and you will know whether your investment ‘stacks up’ regardless of where we are in the property market cycle.
We have made offers on many properties only to be out bid by another investor, which you have to be ok with. As long as you know the maximum price you are willing to pay to ensure the property is a good acquisition for you, then you will become content with losing properties, which is all part of the course. The investor that out-bids you may have a completely different strategy, may not have a strategy at all, or may know something that you don’t, but it really doesn’t matter either way, as you know that the price the property sold for wasn’t right for you. You move on to the next one.
In the first sentence, I highlighted the word ‘potential’ rather tongue in cheek and I will explain why. There is always a reason not to buy. For example, over the last 5-10 years investors could have used any of the following reasons not to act:
- It was only a few years since the property crash of 2008 – I’m hearing a lot of bad things about investing in property…
- Clamp down on Buy to Let landlords – tax changes, stamp duty increases etc.
- Brexit – what will this do to the property market?
- COVID-19 – the economic damage will cripple the UK housing market.
The media love to paint a negative picture on things, and as a nation we love to read about the latest crisis or problem. This is not to say that the media do not cover positive news stories, but more there is a ‘glass half empty’ vibe to our media consumption. Recently, we have been in (and remain in) the grips of the COVID-19 global pandemic, which has been devastating to people’s health, the global economy and the confidence of people across the world living in a ‘new normal’.
Why do I mention all this? During this period alone, house prices have rocketed, estate agents, tradesmen, solicitors have all been busier than ever. Yes, there have been incentives e.g. stamp duty freezes, but people have been moving homes at an ever increasing rate. It has caused people to reflect on their personal goals (financial and lifestyle) and take action to make changes in their personal life. Also, during a time where house prices are on the up, professional landlords have been expanding their portfolios, more new landlords are entering the market by the day. All with the backdrop that there is going to be house price ‘crash’, then the next week we are having a ‘post-recession boom’.
Why are professional landlords buying at such a ‘risky’ time? The answer is that they know their goals, they have a strategy, and they are taking action. They are likely to have a long-term view on their investments, knowledge of buying the right property deals, the confidence to ride out any short-term turbulence and the understanding that over the course of each decade house prices go up. Period.
Prior to the COVID-19 pandemic, the media was talking about the impact of Brexit and the impending property crash, and so on… we’re not trying to say that there are not risks with investing, as we cover in our ‘Top 7 risks of investing in property?’ blog post. Instead, the point we’re making here is that there is always a negative backdrop if you look for it. You will have heard from a friend or colleague why property investing doesn’t work, because they tried it once (without the knowledge, strategy or support more than likely) or their hairdresser has a friend who got stung by bad tenants, or property etc. You get what we are trying to say here, but the end result is that people don’t take any action because they are nervous, which is riskier than ever with low interest rates (cheap to borrow money) and inflation on the rise (things are getting more expensive to buy).
There is a reason why property is at the centre of most financially astute people’s investment portfolios, and we are here to support people to achieve their financial and lifestyle goals through property investing. We are passionate about making property more accessible for you and helping you avoid the stress and pitfalls along the way, but most importantly we want you to have the confidence to take back control of your investments.
During COVID-19, there has been an increase in demand for rental properties with more people choosing to rent. As a result, rental prices have gone up. It is extremely cheap to borrow money at present, house prices have been rising, and at a time when some other investments have not been performing, people are turning to property for increased financial security.
We believe that so long as you know your goals, have a strategy/plan, do your research and take positive action, you will be ahead of 99% of the population. If in doubt, seek some professional support, as doing nothing is riskier than doing something. You may have to pay for this support, but if you pay once, you gain the knowledge forever, and so it could be the best investment you ever make. Take action and take control of your financial situation, you will not regret it.
Contact us for a free, no-obligation 20-minute consultation to see how we can help you get started in property investing – it could be just what you need to kick start your investment journey.