When it makes sense for you personally. It can be so confusing to decide which is the best time to buy an investment property as there are many mixed messages everywhere. I’m not convinced that relying on economic forecasting will ever do more than provide a very limited guide. The only way to really establish the best times to buy is to look back in history, but of course that is completely unhelpful.
In considering the ideal time for you to buy, think about the following:
- Are you aware of your financial situation today?
- How much spare income do you have each month, if the property needs to be topped up?
- What do you want to achieve on the longer term?
- How does property fit into this?
- Have you established how much you can borrow?
- Do you know how to analyse a property?
- Have you considered the risks of property and how you would manage them?
- Have you spoken with an accountant about how to structure the purchase?
If you have gone through these questions and feel comfortable then it’s probably as good a time as any to invest. There are a few main reasons that stop people investing:
Trying to wait for the ideal time. But what does that mean? How do you determine the best time? Do you wait for an economic downturn and if so, how do you know when that will be? Sure, taking your time to find a property that meets your criteria is important but if you cannot do that in say 6 months, maybe you need to adjust your criteria.
The uncertainty of the future can be frightening. Is the government going to bring in a capital gains tax? What other tax or regulatory changes will there be? Like the current Healthy Homes regulations. What happens if you get a bad tenant who doesn’t pay or damages the property? All of these things can happen, and some no doubt will happen, which does create risk. However, like anything risk is minimised through good planning. Consider the risk if you don’t buy a property or don’t do anything for your financial future!
I purchased my first property 27 years ago and have bought a lot along the way. Sure, I have very good property knowledge but there are still many areas of property that I don’t know a lot about. I will always be learning. There are many tools and resources to help you. And of course, it is very important to have a great team around you, accountant, financial advisor, property mentor, lawyer and mortgage advisor etc.
In summary be careful that you are not wanting all the stars to align perfectly before you buy otherwise you might be like many people I have meet over the years who are still waiting. In the meantime, the property they looked at 20 years ago that was going to cost them $500 per month in additional cashflow for a few years or was $10-20,000 more than they thought it was worth is now 2-3 times more valuable. Any time is a good time to buy if it’s makes sense to your personal circumstances.