Why waiting can be a costly error in property investment (eBOOK)
While it’s one thing to rush and make poor decisions under pressure, waiting for “the right time in the market” can prove equally costly, and may not be a smart property investment strategy.
In periods like this, when the Perth property market is at a low, many investors become increasingly concerned about whether or not it is “the right time” to enter the market.
But, such a situation provides the perfect illustration of why waiting to get into the real estate market can be costly.
By the time buyers who’ve held off realise the theory that there is a “right time” to enter the market is flawed, they’ve already missed the boat.
Property Wizards director Trevor Dunkley says, “It’s why people are always saying they’re kicking themselves for not getting in earlier in the area they wanted to buy in, which has now skyrocketed out of their reach.”
With the beauty of hindsight, most people realise it’s better to get into the market sooner rather than later as their fear, indecision or lack of time could cost huge monetary returns.
Delaying buying to save a bigger deposit is another trap investors to look out for.
While this strategy sounds logical, it can have a huge negative impact on your hip pocket. Waiting 5 years to save a bigger deposit so you can afford what is now a more expensive property can cost a lot in both lost equity and capital growth.
EXAMPLE: If you buy a $500K property with a $100K deposit on an 80% mortgage and it grows at 5% a year, after 5 years it will be worth $638K. With an interest-only mortgage of $400K, you have around $238K equity.
Compare that to someone who saves for another five years and buys a similar property for $638. With a $150K deposit, their 80% mortgage amounts to $510K – giving them just $127K equity.
That scenario shows how the decision to hold off and save more actually costs them over a whopping $100,000 dollars.
These kinds of real-life examples show exactly why it is better to enter the real estate market sooner rather than later. And, it’s equally important to recognise that there are opportunities for investors in all markets.
You’ve just got to do your homework.
“If you’re prepared to take the time to do the research, or engage an expert to search for you, it is always possible to find a superior investment.”
If you think the time is now and you’ve got any burning questions about property investment, call us on 08·9381·7450.
Or, if you’re ready to get started, why not complete our Getting Started form to get the ball rolling.
Or, if you want to learn about different property investment strategies, or learn more about investing in property in Perth, why not read our free Get Ready to Invest in Property eBook.
It takes you through five simple steps to help you understand strategic property investment and how to make it work for you. Whether you’re a first-time investor or re-entering the market, it will help you navigate the sometimes complex world of property investment and associated issues you need to consider.
So if you’re ready to learn some great insights into getting started in property investment, download your free Get Ready to Invest in Property eBook here.