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The Top, the Bottom, and the Percentages

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When you’re looking at a real estate purchase, things that come to mind are – “Am I buying at the top of the market?” ”Is there a bit more price growth lift in it?” “Am I buying in this right timing so I can just keep riding the way”

For others it’s “Am I at the bottom of the market and if I’m at the bottom, could this be the best buying opportunity?” and then lastly you’ve got others going “This place is really going to grow” but my how much? what’s the percentage? So why I mention the Top, the Bottom, the Percentages, is these are the three most difficult and unlikely for someone to again and again and again accurately predict. When it comes to investing in property or any investment such, we’ve seen many experts from economists, banking governors, so many people in high or influential positions down to your maid at the barbecue – call different positions of your interest rates and property prices, where they’re going to be property prices on the bottom and even how much price may grow by. So when you start to consider that, look at all 2017 in Sydney and Melbourne as an example. Someone was purchasing across that Peak period may have gone in with the assumption that all good things just always continue to rise then, they were shocked that didn’t occur, the good rises didn’t keep hammering away like they did in the years prior. Now sure long-term they could hold and go through the ups and downs and there may be a new Peak like there always has been in that Sydney sort of real estate journey. But from that perspective when they’re looking into it they thought that there was more to go on the top but that was the top at that point. So when you think of the many experts as well that bought for people at that top, right? So that’s where it becomes very unpredictable in terms of when that peaking environment is. But they’re usually are signals and things that come to mind from a “this maybe that period” but is it? That’s the unknown.

The same with The Bottom, when looking to invest in real estate, some people are saying the bottom is 40% deep (if you remember some of those articles with Sydney) some people are saying it’s got another 20% to go, some people are saying it’s hitting the bottom auction clearance rates are back up now – the market’s come alive. So you see from different experts different opinions it’s changing because their bottom is one of the hardest things to predict. You know, yeah, you might be able to look at the quarterly advantages, the six monthly trends, and maybe say it’s not likely for something just to go up tick in the next quarter. But the funny thing is it has happened.

And then the last part is Percentages. Signal A signal B signal C might be showing Capital growth potential but then how much is that percentage? Is it a 10% 15% 20%?

So why I want to mention the Top the Bottom the Percentages is that yes you can really de-risk by having the right data to look at, the right on the ground, the right relationships. Yes, you can improve buying results with all those three’s as well. But if you’re in a scenario where you’re being promised growth rate returns, looking at peaks and saying “This is the Peak” or looking at bottoms and saying “This is the Bottom”, really tread carefully with your property investing strategy because many from the newbies to the best have fallen wrong. So when considering your research come back to the indicators not so much the prediction of what’s the Top or the Bottom and don’t put yourself in a position where you start relying too heavily on growth percentage forecast. Growth and what it could do, they are some signals that could share what could be out there, but in terms of reliance on a percentage, tread carefully on that front.

So that’s it from us here at InvestorKit, The Experts in Wealth Creation, helping you take action.