Not only does timing play a huge role in how much wealth you can build in the short term with property, but additionally the length of time you hold onto your investment for can affect your success in the long term. Recent statistics on “Timing” the Market Vs “Time In” The Market and how far your dollar will stretch because of these factors has revealed some interesting results.
As we all know, not only does what property you buy affect your outcome, but also when you buy it can create a vastly different experience for investors.
According to a report released by CoreLogic earlier in 2017, properties that resold for a loss by their owners had an average ownership length of just over 6 years for houses. However the properties that realised a profit upon selling were owned on average for just over 9 years for houses.
The old saying “time heals old wounds” may certainly apply here, but what is clear to see in these statistics is that far too many investors are buying properties at the wrong time of a growth cycle without a solid cashflow plan that would allow them to hold for a far longer period of time, and realise strong capital gains.
Timing a market effectively can mean that you benefit from two growth cycles rather than just one, creating a completely different outcome as the years go by.
Property should be a long term investment, which is why it has been such a reliable vehicle for retirees to build their wealth. And what is “long term”, you may ask? A minimum of a decade would be a good rule of thumb, and my hope would be to see two significant growth periods over that time.
Another interesting take away from this report was that when it came to property types houses were almost always responsible for a lower percentage of resale losses than units were. This can usually be attributed to the supply of units being a far less predictable asset, as well as houses usually controlling a larger portion of land, where most of the appreciation occurs.
Across many capital cities of Australia there has been a widespread fear of an apartment oversupply, which may also be adding fuel to this particular fire.
At our next complimentary live event I will specifically focus on several of the local Sydney markets and what stage of the cycle they are at, how to locate high yielding properties with a strong history of capital growth, and where we believe the next rising markets set for investment are. Our last event sold out so with limited seats available please don’t delay and register using the link below now.