Like a cabbie getting asked how his night has been, as a Property Strategist I rarely make it through the day without being asked ‘how’s the market?’.
Luckily for my career, the truth is that no one really knows.
The market is largely the opinion and sentiment of a given group of people at a moment in time.
While chatting about the market is a great strategy to pass the time at a cocktail function, it means little to me professionally.
Property strategy is very much about timing the investment with the investor’s life.
Despite speculation, property is a long-term hold; entry and exit costs make it a very risky proposition to make flipping a sound investment strategy.
Instead of following the market, it is prudent to consider what is within our control.
As an example, I have bought development sites at the right time in the market but at the wrong time for my family.
Development is capital intensive and undertaking this sort of investment on one income, while my wife was on maternity leave, is a prime example of a great opportunity with poor timing.
It is a lesson that I am happy to pass on to my clients.
Further consideration should also be made for unforeseen events, such as death, divorce or disaster.
As a starting point, all investors should first consider the following questions in order to get the best strategy for their circumstances:
- When to begin?
- When to expand?
- When to consolidate and be more cautious?
First home buyers need to consider whether they have saved enough of a deposit and whether they are ready to commit to home ownership.
More experienced investors might look at the timing of expanding their asset base and whether their strategy allows room for them to invest interstate or to try a development.
Investors near the end of their career might look at whether they need to consolidate and if their portfolio is working for them by producing increasing returns.
In short, the market is a concept beyond our control, with no tangible rules.
Instead of trying to break the code, time your life instead and seek answers to these initial questions.
Invest in expert advice to develop a strategy tailored to your circumstances.
Over the long term, with a proven strategy, it is very hard to get it wrong.