Buying low and selling high is your road to wealth, but can you time when the housing market has reached its bottom?
Let’s answer that question by asking another: Have analysts and realtors ever been able to accurately predict the peaks and valleys in the market? These days, it seems as if they are wrong almost as often as they get it right. If you break this down even further, there could be specific neighbourhoods or condo buildings with the highest selling price while everything else is taking longer to sell.
The trouble is that we can see when the market peaks a minimum of two months after it happened, which means you can’t time the peak or the bottom. By the time we realize it’s happening, it’s already history!
That doesn’t mean making money in the real estate market has to be a gamble. Just like other investments, such as the stock market, there are strategies you can deploy to dramatically increase your chances of coming out ahead.
Are you a first-time buyer trying to navigate today’s complex market? Check out our Ultimate Guide for First-Time Buyers in Guelph
How long do you plan on owning the house?
If you want to get rich fast, real estate may not be the best way to do it. Real estate is a long-term investment typically held for at least 5 to 7 years. You can flip houses by buying and selling within a year, but this only makes sense in an appreciating market, and in our current market, flipping would be disastrous.
This is a market to buy and hold, so if you’re only looking to live in a house for a year, you’re better off renting than buying. I believe real estate will remain a strong investment over the next several years. Demand will remain high as new builds face labour and supply shortages, immigration starts ramping up again, and large corporations like Blackstone look at the Canadian real estate market.
Are you thinking about investing in an income property in Guelph? If so, the posts below will help you get started:
- Five Best Cities in Ontario to Buy Recession-Proof Investment Properties
- How An Experienced Guelph Real Estate Team Can Help With Your Investments
- A Complete Guide to Real Estate Investing in Guelph
What is the type of market, and what strategies work best for that type?
The real estate market is currently unstable; prices have fluctuated rapidly over the last few years, and with inflation nowhere near what is considered normal, there is pressure on the Bank of Canada to continue raising the interest rates.
In the meantime, most buyers have paused their search to try to time the bottom. Robert Kiyosaki, author and wealth expert, believes the rich understand that the times of greatest crisis are often the greatest opportunities to acquire wealth.
Most analysts believe interest rates will come down again at least a few more times this year. Now is a great time to jump into the market while prices are down and there is plenty to choose from. Interest rates aren’t as modest as they were, but historically they’re still quite low. Investors can continue adding to their portfolio knowing rental amounts have increased, vacancy is low, and investment properties on the market can finally cashflow again.
In Summary
The bottom of the market is only known a couple of months after it has occurred, so it’s impossible to time it perfectly. We know that prices are now low and demand is high, meaning now is a good time to get back in the market. In addition, real estate values tend to rise steadily given enough time.
Do you have questions about buying or selling in Guelph or the Tri-Cities? Our Guelph real estate agents are happy to help. Reach out today at info@gowylde.ca or call 519-826-7109 for more information.
