There’s always an element of timing when it comes to investing in property. As well as your resources, it’s also important to consider the current market conditions and whether or not you’ll get the highest ROI now.
Today’s property market has given us all a lot to think about, so you’ll need to weigh up the factors that will influence your decision when you’re considering investing in property.
This article discusses the key considerations you should make to determine whether it’s the right time for you to buy property.
Market Trends and Interest Rates
Interest rates will probably always play a big part in the property market. As interest rises, so do borrowing costs, which has both positives and negatives.
As an investor, you can take advantage of the effects of high interest rates, which will slow down buyer demand and put downward pressure on prices. No, high interest isn’t good news for any investor, but this might be an opportunity to get a better deal if you can buy outright or get good finance. Keep an eye on rate trends and check online for bank announcements to know when to take advantage of a better deal.
Supply and Demand
The number of properties for sale against buyer demand is another key factor to consider when buying an income property, as it drives pricing at any time of the year.
If you’re looking to buy in an area with housing shortages, the value of the available properties will be steadily increasing, so investing will give you almost guaranteed long term gain. But in areas of oversupply, you might see prices stagnate or even go down—not the outcome you want. Make sure to research local markets before you settle on an area to buy in, as conditions can be different from one neighborhood to another.
Economic Conditions
The property market isn’t only influenced by buyer behavior within the market itself—it’s also affected by broader economic indicators like employment and consumer confidence.
When the economy is strong, property values are generally higher, as more people can afford to buy or rent. But during times of economic uncertainty, it’s common to see property prices stabilize or go down. In these cases, if you’re willing, it’s best to hold onto your investments until the market recovers.
On the subject of the economy, your financing will also determine the viability of your investment. Hard money finance options in Arizona are more popular than traditional loans for property financing as they offer quick, flexible funding, but their interest rates are higher, making them better for flips or other time-sensitive projects.
Keep the Bigger Picture in Mind
When it comes down to it, as a property investor, you need to ask yourself whether you’re a short-term or long-term investor.
If you’re a short-term investor, you’ll be more sensitive to market fluctuations, but if you have long-term investment goals, you can ride out the dips in favor of consistent returns over time. When you know your goals, you’ll be better equipped to decide if now is the right time for you to invest.