When is the Ideal Time for You to Invest in Real Estate?
This article originally appeared on Lamudi.
Time and time again, it has been proven that buying real estate is one of the best ways to build wealth and achieve financial stability. Just taking a quick look at the list of richest Filipinos, you would see that the majority of them have ventures in the property industry.
A piece of real estate is a stable, income-generating asset that would give you security even in the middle of a crisis. That said, there’s no question as to whether or not it’s worth investing in real estate.
The question, however, tilts to the subject of timing. While there’s a general rule in this matter, captured in the age-old saying, “The only bad time to buy property is later,” there are also individual considerations as to the best time to invest. Here are some of them:
Amount of Savings
It’s no secret that purchasing a piece of real estate, whether that’s a condo in Makati or a beach house in Batangas, entails a large sum of money. Yes, you may be applying for a mortgage, but you’ll have to pay the downpayment and closing costs before you get the actual property and start with the monthly payments. Those monthly payments are no small thing, too. Remember, you’ll be settling loan payments, property taxes, maintenance and repair fees, homeowners insurance fees, and utilities, among others.
This is why the best time to invest in real estate is when you already have enough savings that you can cover all those costs mentioned without falling behind on other living expenses, such as food, transportation, and children’s education.
Current Life Stage
Some real estate investments would require a huge amount of money and time. If you’re thinking about buying an apartment and managing it yourself, you have to screen tenants, address complaints and repair requests, maintain the property, and the list goes on. If you’re buying affordable foreclosed houses and lots, say, in Bulacan, to have it fixed and sell at a much higher price, you’ll have to supervise the entire renovation project (even though you have trusted contractors working for you). These endeavors can take so much of your time.
This is why the best time to invest in these types of real estate is when you’re at a point in your life that you’re ready to take on the busyness of projects. This is usually before tying the knot and having kids or when your children are already adults, off to college, or getting married themselves.
The market changes based on supply and demand. In certain locations, it’s a seller’s market, in which the demand surpasses supply. There are plenty of interested property seekers in a location with few properties up for sale. This usually results in higher prices. Meanwhile, there are locations that have a buyer’s market, wherein there are many properties for sale, and there are only a few interested buyers. In this case, sellers are more likely to be flexible in their prices and negotiations.
Considering this, the best time to invest in real estate is when you stumble upon a buyer’s market. Seize the promos and discounts offered by developers. Or, be proactive in negotiating prices with sellers.
Crisis and Opportunities
Most people wouldn’t think of property purchases during a crisis simply because of the fear of risks. Yet for seasoned investors, it’s a completely different story. Rather than waiting for the market to improve, they are aggressively buying real estate, taking advantage of the falling prices. Their mantra is simple: if the market has already hit rock bottom, there’s only one way left to go, and that’s up.
Considering this, the best time to invest in real estate is when you find yourself in a bear market. As long as you have enough to cover for your other needs during a crisis, buying real estate at this time is a good move. Over time, as the market stabilizes, the asset you bought from the falling prices will increase in value. If you’re looking to invest now, refer to this trend report to know pandemic-resilient hotspots.
Are you planning to invest in real estate? Embrace the right timing. Now is the time to dive into the market, especially once you’ve considered your financial stability, current lifestyle, the state of the market, and the opportunities in crises.