Given the complexities of the domestic real estate markets, of which there are nearly 400, it is extremely difficult to make predictions on trends.
Despite this truth, many people do try to make predictions about housing markets, and buy based on these predictions.
When you are looking to build your financial freedom, the odds behind this approach are not high.
This is why we were intrigued by what Jason Hartman of Platinum Properties had to say on the matter.
He contends that attempting to purchase investment property based on predictions is just not a wise move to do.
He notes that there is a considerable amount of outside interference from governments and central banks, which make predictions all but moot.
Jason said timing the market is a fool’s game, and his favourite mantra is, “Don’t wait to buy real estate, buy real estate and then wait.”
Interference in the Real Estate Market
It wouldn’t be so difficult to time markets if there wasn’t so much outside interference from the government and central banks.
Without the outside forces, one could analyze patterns and use the data to do a decent job at making predictions.
But, these forces do interfere with the market.
If the Federal Reserve increases interest rates it creates less affordability, and it’s going to dampen price appreciation.
At the same time it should put upward pressure on rents as long as there’s not a lot of new supply being created and the population is still increasing.
But, that’s not the way it works.
Have a read of this article to better inform yourself on the role of the Fed in the housing markets.
Furthermore, even without the government and central bank interference, there’s still the business cycle to take into account.
You need to look in the rearview mirror to really have success making predictions.
Work With a Real Estate Specialist
Despite outside interference in the real estate market, many people have been able to accumulate wealth and financial freedom through careful selection of investment properties.
The smart advice is to work with someone experienced in the market, as it is hard to invest remotely without a specialist.
If you are just starting out and intend to buy only one property, a qualified investment counsellor company will help you pick a market and assist you in your purchase there.
A few years later, buy in another market, and effectively build a portfolio over time that’s geographically diversified.
This is how you design your financial freedom through savvy property purchases.
What can we learn from our understanding of the outside forces at work within the domestic real estate markets?
First, forget about predictions, this is too risky.
Secondly, use the knowledge of a specialist to select your properties in well-researched markets.
Finally, don’t wait, or opportunity will pass you by.
Start generating your wealth while you can.