Many inexperienced residential property investors start talking about selling their investment property when the market slows down. After all, the market is bad, therefore it’s time to get out of the market – right?
Wrong! Is the investor going to realise a good return on their investment by selling when the market is slow? Of course not! Shrewd investors – whether they invest in the stock market, antiques, art or property – have a more fruitful strategy. When the market is low is the time to borrow more money and buy a second property. Selling now will be a poor return on their investment, but buying now means greater rewards when the market does improve. After all, experienced investors know that the market is cyclical They know that when the market is hot is the worst time to buy as buyers tend to outnumber sellers and they end up competing for stock that is snapped up at alarmingly increasing prices. In fact they may well profit from the faulty logic of the inexperienced property investor by buying the very investments being dropped onto the slow market by the less experienced who think property is no longer the go.When the market slows down, the smart investors speed up, so that they are expanding their property portfolios when the market is in their favour inorder to be sitting pretty when the next boom comes along.
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