To achieve optimal results in property investment requires more than just ‘dumb luck’…quite the contrary in fact.
To succeed in achieving your financial objectives with real estate, it takes persistence, perseverance and to some degree, really good timing.
Can you pick a winner?
While every smart investment approach requires the backing of a smart investment strategy, there’s always some degree of necessary speculation involved in purchasing a property asset.
That’s because in life, there are no guarantees. Ask the hundreds of investors who bought into resource driven, real estate boomtowns; small, nowhere places now at risk of dying a slow death.
But in today’s data and information driven markets, there’s really no need to take unnecessary risks with your money.
Vast reams of quality educational material are available to investors online, while dozens of research houses are dedicated to reporting various property market stats.
Not to mention the hundreds of professional, property and financial service based providers emerging across Australia, to assist a growing number of investors. (And of course, make hay while the sun shines!)
Now, more than ever, there are lots of ways to conduct thorough due diligence around any investment you might be considering…as well you should. Property investing is a serious business that requires serious market research.
Get it right, and you can walk away with a winning asset that adds optimal cashflow and long-term gains to your portfolio, with minimal risk.
Timing the market, or time in the market?
Some property advisors will tell you that ‘time in the market’ is more important than ‘timing’ the market.
In other words, you’re better to buy whenever you can in a good location and own a high growth asset for a longer period, than wait for the ‘best point in the cycle’ to purchase and risk paying a higher price when the market moves on.
But if you could indeed approach property investing with that added foresight of knowing when a market was most likely to peak, and when it was close to or at the bottom of the cycle, why wouldn’t you?
The National Property Clock – Houses
As noted earlier, we live in an information rich age, with so many valuable resources that can make our real estate investment journey that much more effective.
Make no mistake; the next phase of the property cycle will sort the mice from the men. Those investors who were pro-active and wise in their asset selection will continue to prosper when things start to slow down.
Whereas those who just jumped on the property buying bandwagon without much thought as to what they were doing (or where, when or why for that matter) will be caught with their proverbial pants down.
It’s of course a good idea to be one of the investors who either did your own due diligence, or at the very least, engaged a credible and appropriately experienced property professional to do it on your behalf.
Or…at the very, very least, check out Herron Todd White’s August 2015 Property Clocks for housing and apartments…
The key is to look for opportunities in proven areas that provide above average long-term capital growth, alongside strong rental yields. This will make your portfolio far more sustainable, and able to endure any changing market conditions over the ten, twenty or thirty plus years you hold it.
By opportunities, we mean the chance to acquire strong performing assets that are demonstrably better than the averages, at an optimal point on the property clock.
This is logically, at the bottom of the market or during that very initial upswing in the recovery phase, between the 6 and 9 mark.
According to the HTW clock, a number of locations warrant a mention for their favourably transitioning housing markets right now. Notably Melbourne, Brisbane, Cairns, the Gold and Sunshine Coasts and Canberra, all represent rising markets.
While Hobart, Launceston and Alice Springs are just starting to find their feet again.
The National Property Clock – Units
Interestingly, when you examine the corresponding HTW Property Clock for units/apartments, it’s the same major city markets that are currently on an upward trajectory.
According to the HTW analysis, the opportunity for investors to execute valuable timing in getting into apartment markets that have nowhere to go but up is currently available in the likes of Canberra, Adelaide and Rockhampton.
While property cycles are never an exact science, years of evaluation around various fundamentals that we know influence accommodation supply and demand and therefore, property prices over the long term, means investors can apply some very valuable hindsight, when trying to plan ahead.
The potential to secure a high growth, high yield asset at the prime point on the property clock – that is during a rising market – has always represented the ultimate challenge for property punters.
In this new age, however, it’s becoming that little bit easier to tick all the investment right boxes, at the best possible time.
If you’d like more information regarding the best investment strategies and assets for your requirements, keep an eye on your Inbox for information about our upcoming workshops, where the Trilogy team will be joined by expert property advisors to take a closer look at the Canberra housing market in depth. This is your chance to learn more about timing your property investment purchase to get the best equity return possible.