Timing is Everything

Private Property South Africa
Lea Jacobs

Property is a long term investment and although sellers may make a profit in the short term, particularly in a boom, it should never been seen as the norm. Property works in cycles and what goes up invariably comes down. In this instance, timing really is everything.

At this stage the market is littered with properties which owners have paid too much to own. Much has been written about the effects of overpricing, but unfortunately many simply can’t afford to sell their properties at a market related price as this would lead to them losing - in some cases - hundreds of thousands of Rands.

You would think that humans would learn from the past – although the recession which hit the world in 2009 was one of the worst ever, it wasn't the first and it definitely won’t be the last that so many investors are caught on the back foot.

Knowing when and when not to invest is key. Those who buy property in a downturn and sit back patiently waiting for the tide to turn, are, generally speaking, the ones who make the most money. Those who listen to their friends (who invariably exaggerate any profit made) and decide to invest when everyone else is doing so, often learn the hard way that there is no such thing as a quick buck.

Unfortunately, people are like sheep and unless they are dedicated property investors they often fail to see the warning signs which are apparent before the bottom falls out of the market. Essentially, the rule that should be followed is; ‘invest when no one else is interested.’ Timing is everything and investing too soon when property prices are still relatively high can be as dangerous as investing too late once prices have started to rise.

Demand drives prices, even in a downturn, and the adage ‘you snooze you lose’ comes to mind with regard to those who are nervous about investing, even when bargains are to be found. While property investment should never be taken lightly, those who err on the side of caution and only start investing when everyone else does, are not going to make as much money as those who buy at the right time.

How many times have you heard an older person bemoaning the fact that they did not invest early enough? The prices of today may seem outrageous, but when compared to property prices in 10 years’ time – they will seem like the bargains of the century. Investors who make a living from their investments understand this perfectly and they know that when it comes time to sell, the property will yield a healthy profit.

Recessions are unpleasant and the repercussions are often felt for years after the initial fallout. Although no one can predict when the markets will turn, they will, they always do. Those who make the most of the bad times by investing in the right product at the right time are certainly going to be better placed than those that sit back and wait for better days.

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