Buying When you can Afford it VS Timing the Market

[Purple Property]

So two options.

We can afford to buy a house now. We have pre-approval, etc and are based in Auckland.

Second option is to try and time the market and wait until yields increase and look at alternative investments in the meantime.

What option have people followed in their strategy? How has it worked for you?

[princess]

Hi Purple,

are you looking to buy a PPOR or an investment?
I'm by no means an experienced investor, but have bought and sold a few properties over the years, and did best from the one i bought 12 years ago in a bit of a slump. waited for 5 years for the value to move even a few percent, then BAM.

I'll PM you as we may be in similar situations?

[PTILoveYou]

If you have good incomes, buy now and get into the door.

Yields may never drop back to what it used to be, examples are like back in 2000s, and 2009-12, especially for Auckland.

If you don't buy now, you will have to wait a long time till the next recession, and god forbid you snap and buy just before the crash (ie 2007/0.

[Frezzinghot]

If you have good incomes, buy now and get into the door.

Yields may never drop back to what it used to be, examples are like back in 2000s, and 2009-12, especially for Auckland.

If you don't buy now, you will have to wait a long time till the next recession, and god forbid you snap and buy just before the crash (ie 2007/0.

Hi Gary

I brought now for this very reason, in your opinion when do you see the current boom ending? I have thought a lot about when this current cycle will peak and did not want to be on the wrong end of any further growth.

FH

[PTILoveYou]

Hi Gary

I brought now for this very reason, in your opinion when do you see the current boom ending? I have thought a lot about when this current cycle will peak and did not want to be on the wrong end of any further growth.

FH

Well it all depends when the next USA sharemarket/bond market crashes, but who knows when that will happen, could be this year, next year or even in 2018 or beyond...

So rather than waiting for the stars to align again (ie 2000-2003, 2009-2011), better to just buy now and enjoy whatever the climb this boom still has.

[Frezzinghot]

I suppose all the lead indications at the moment appear solid, high immigration, low interest rates, lack of houses vs buyers. I for sure hope it lasts at least a couple of years. Sorry to sabotage the thread but think this may be relevant to your original question Purple.

FH

[chrisgoh]

If the property is for personal stay and you are going to keep it for long-term, buy now.

If the property is for investment and you intend to keep it for long-term (never sell), buy if the cashflow are manageable.

If you want to speculate or flip the property in short-term, forget it.

[Orkibi]

I'm not buying now to hold unless is a good deal with good yield or yield potential.
If you don't own any investment property yet then make sure what you buy is good deal.

the prolom is that only full time investors (mostly) can find reasonable deals in this crazy AKL market.
Golden rule of real estate is and allways will be YOU MAKE YOUR MONEY WHEN YOU BUY.


if you are mum and dad investor and aiming to own 1-2 properties max then target 6% gross in central AKL as rule.

[Frezzinghot]

If the property is for personal stay and you are going to keep it for long-term, buy now.

If the property is for investment and you intend to keep it for long-term (never sell), buy if the cashflow are manageable.

If you want to speculate or flip the property in short-term, forget it.

Chrisgoh, understand your first 2 points, but why do you think flipping is a bad idea? Properties are still selling within a few short days of them being listed, also the property tutor crowd are right in amongst it, are you saying this as you believe some of these strategies are too risky at the moment?

I remember back in 2011 when I was doing a trade on a block of flats I got caught out, I thought the market was good but in fact it had already hit the peak, I was far too confident and brought the wrong units and it took me over a year to sell them all, I made bugger all on them but it taught me a valuable lesson on timing the market, not too dissimilar to todays market but think we have not seen the peak.

FH

[chrisgoh]

Freezinghot, I am risk averse, not a fan of speculator.

Still looking to buy and hold, but very selectively.

Sure, many speculators made heaps of money during boom period, good for them. This sector best reserved for season investors with deep pockets and can afford to lose or hold. Not for novice.

[XridProp]

Chrisgoh, understand your first 2 points, but why do you think flipping is a bad idea? Properties are still selling within a few short days of them being listed, also the property tutor crowd are right in amongst it, are you saying this as you believe some of these strategies are too risky at the moment?

I remember back in 2011 when I was doing a trade on a block of flats I got caught out, I thought the market was good but in fact it had already hit the peak, I was far too confident and brought the wrong units and it took me over a year to sell them all, I made bugger all on them but it taught me a valuable lesson on timing the market, not too dissimilar to todays market but think we have not seen the peak.

FH

2011 a bad time in Auckland or were the flats somewhere else?

[elguapo]

Chrisgoh, understand your first 2 points, but why do you think flipping is a bad idea?

Can I ask why you think flipping is a good idea?

[Orkibi]

Up to around the end of 2012 the Auckland market had heaps of opportunities. From 2013 onward it started to be slowly over heated... That's how I saw it anyway.

[Frezzinghot]

2011 a bad time in Auckland or were the flats somewhere else?

Papakura, I was on a trading buzz back then and thought I could continue the success I had with a previous trade but made a mistake by buying a block that could not be moved on easily, even in today's market you would struggle to make a good profit on them. They were just a bad buy but ended up coming out alright after the block was sold.

FH

[Frezzinghot]

Can I ask why you think flipping is a good idea?

profit to use for deposits or pay down PPOR. If the market I play in was not so hot I would try and trade again, I would like to reduce our personal debt on our home and think a few trades would be great to do this. But market at the moment is moving so fast and very hard to find anything worth trading.

FH