When is the best time of year to buy property? Is one month better than another? Surely it’s not the end of the year?
The truth is, any time of year is a good time to buy if you understand the market and your own financial position. You will still be able to make a good investment whether you buy in May or December.
Instead of waiting for a certain time of year to buy property, you should focus on understanding the market as a whole in relation to your personal situation.
Let’s look into how you can choose when the best time is for you to invest. You can do that by understanding the property clock, having the right mindset and knowing your own position.
Understanding The Property Clock
The end of the year can be a fantastic time to buy property. There are plenty of bargains to be found as people plan to change schools, jobs, or cities for the new year. But that doesn’t mean to say that you should settle for any old property.
Even though there are some bargains to be found at this time, you need to ensure you are investing your money wisely. Part of that is knowing how you should approach the sale in relation to the property clock.
If you have read our articles before, you will know all about the property clock. But in case you haven’t, here is a quick rundown.
In New Zealand, property moves in cycles of around 10 years. There is a Boom period (that peaks around the 7th year of the decade) where prices are high and you should expect to pay a little more for a property. Then around 5 years later, the market hits a Recession period (around the 2nd year of each decade) where the prices in the market lower.
The simple way to look at the cycle is that you don’t want to pay top dollar in the recession period, but that you might have to pay more in the Boom period. At all times in the cycle, you should aim to pay below market value for the property. That is how you will be able to grow your investment and turn a profit.
So, instead of looking at the best time of year to buy, look at the cycle.
Having The Right Mindset
Very few people have three quarters of a million dollars sitting in the bank just waiting to be invested in property. So, chances are, you are going to have to borrow money for your investment.
The thought of this scares many people. This is down to a deep seated belief that stems from our parents. You were probably taught that debt is bad and that you should never take on too much of it. To some degree, that statement is true. You shouldn’t spend money you don’t have on things that aren’t going to show a return.
But there is such a thing as good debt. Borrowing money for a property that you are going to improve and then rent out will prove to be a good debt. Not only will it pay itself off, but over time, it will start turning you a profit.
Once you think about debt in this way, it seems like an obvious decision to invest in property to safeguard your retirement and allow you to live the kind of life you want to.
Knowing Your Position
Once you understand what the market is doing and have the right mindset, you need to assess your own position. Are you equipped with the knowledge you need to make a sound investment?
If not, then it is time to seek some advice.
Here at Ronovationz we are property experts. We are not shy at admitting it. Collectively, our property students have created almost $1 billion in sound, quality investments. Not only that, but they are building their property portfolios further as we speak.
They have done it all under the advice and support of Ron and his knowledgeable property coaches. Ronovationz know everything there is to know about the Auckland property market and we want to give you that knowledge too.
If you are ready to start building your property portfolio (or add to your existing one), then you can get in touch with us here: https://ronovationz.com/contact/