When to buy first PI ?

[oxossi]

Many years ago I jumped into the stock market - around July '86 was it ? Anyway I was making lots of money until the October crash which wiped out all profits and more...

Thus, in my present determination for a go at PI, I would like to make sure I get off on the right foot, even though I am looking at long term investment, not short term speculation. I have been told about the 7-10 year property cycle. Should I hold off buying a cheap house for minor renovation and rental until the boom has lapsed into bust phase ?

If so, how long should I expect to wait - a year or two ?

I am located in and would look to buy in Far North Qld.

Thanks, Oxossi

 

[Aceyducey]

Oxossi,

Welcome to the forum!

In some senses your timing is analogous to your stock market timing. You got in when there was an upturn (but not at the beginning) and rode the bull to ruin (not knowing when to get out).

At the moment most Australian property markets are slowing down after a long boom - but there is really no clear indication that a bust is imminent, or indeed will happen at all.

Property behaves differently to shares and you should not assume that the rules are the same - that's where many share traders get it wrong when they follow a buy/sell approach and measure property metrics in the same way as share metrics.

First, you need to get an understanding of property investing. It's not simply a matter of going out and buying property.

Have you done much background research on the investment process or the areas in which you are considering investing?

If not - don't even start thinking about whether this is the right time to buy or not. Timing it is less important in property because it's primarily a buy & hold investment - what IS important is knowing how to buy well & how to add value to your investment properties (IPs).

Once you've understood the finance and contactual processes, watched the markets you want to buy in for a period (including looking at a lot of open houses & auctions & gotten an understanding of real estate agent (REA) speak), gotten a good feeling for how the market behaved in the past & a feeling for where it's going in the future, you'll be in a position to make a good return no matter when in the cycle you buy.

Cheers,

Aceyducey

 

[Hetch]

Just remember to consider the time frame especially -

MOST property is kept for years at a time -

If you are going to buy a property and keep it for 5-7 years you want to buy something

that you are comfortable with
that will last that time period

Don't rush it at all - do your research and the time you enter shouldn't matter that much. Five years is a long time

Hetch

 

[oxossi]

Uniform shares, unique houses

Thanks to Aceyducey and Hetch.

From what you said it occured to me that shares are
uniform - ie one batch of 100 Newscorps shares at $21 ea
is the same as another batch of 100 Newscorps shares at
$21 ea. But since each house is unique, a bargain with
excellent improvement potential can be bought at any stage of the cycle and be profitable (in the long run).