You’re motivated to leave Wall Street investing for good and purchase an income property because, in a recent nightmare, you were visiting Bernie Madoff in prison to see if he had any hedge fund ideas. Good decision. Wall Street – bad. Income property – good. If you’ve been reading our blog, you already know the Empowered Investor Network criteria for finding a good location.
Is it time to pull the trigger? Not so fast, Dirty Harry. There’s a little thing you should be aware of called timing. Even in the best of real estate markets there are cyclical swings. You want to time your purchase to get in as close to the bottom of the swing as possible. It just makes good sense. Why pay more for a property if you don’t have to? Plus you will be using the potential of leverage to it’s fullest.
Likewise, you want to be aware of the market cycle when it comes time to sell. While we discourage the practice of flipping (transaction costs and taxes can eat up your gains), there will likely come a time to sell your income property. Maybe your ready to do a 1031 Exchange and roll into a larger one. In any case, know where the market cycle is and try not to sell on a downswing. Once again, we’re just using plain sense here to maximize profit.
Wondering how to tell if the local market is swinging up or down? Call 714-820-4200 and ask us. We love to talk about it.
Flickr / AlishaV
