The property investment strategy cycle

There’s been a dramatic increase in the number of so called ‘experts’ hitting my email inbox cycle

People I’ve never heard of before, people making unbelievable claims about their ability to help me get rich quick.

People whose track record seems consist of a recently created web presence with no credible background whatsoever.

Right now, with housing market prices rising almost everywhere, it’s a safe bet for them to strut their stuff and urge us to let them help us achieve unimagined wealth from property investment.

But what happens when the market turns from growth to stagnation, or even decline? 

These overnight sensations quietly disappear from public view, handing the stage back to other experts who have been in the business longer and can offer real investment solutions even when no overall growth is to be found.

This happens because the housing market goes through many different stages, and offers investors many different and sometimes highly complex investment strategies.

It’s this diversity that enables experts and educators to concentrate on just one strategy which they can then promote as being effective at a particular point in time.

The table below demonstrates how this works:

Housing market performance Investment option Strategy to achieve result
Low growth Increase value Renovate or develop
Erratic growth Buy in growth areas Find the next hot spot
Improving market Long term growth Buy based on past performance
Good growth spreads Medium term growth Find potential ripple effect suburbs
High growth Short term growth Flip and trade off the plan
Prices falling Look elsewhere Invest in booming overseas markets
Bottom of market Reduce buying price Predatory buying, find stressed owners
Stagnant market Income from rent Long term rental guarantees

There’s little point in marketing and teaching a system that finds stressed owners or teaches you how to engage in predatory buying practices when the market is going gang busters, interest rates have fallen and banks are freely providing housing finance, although this is exactly the right time to promote a method which flips and trades of off the plan properties.  


On the other hand, after a period of rapidly rising interest rates, tight housing finance and falling prices, a system teaching predatory buying practices is highly effective and stressed owners can be forced to part with properties at a fraction of their real value, yet this would be the worst possible time to adopt a strategy for buying off the plan properties to flip or trade.

I do not endorse either of these strategies as they have little to do with property investment, but while they’ll fail at the wrong time they will certainly work at the right time, and this is true of almost all the strategies available to investors.

There are however, some lessons we can learn from the property investment strategy cycleproperty time market clock house cycle investment timing watch growth

It is essential to use the strategy most suited to prevailing market conditions and right now there’s a host of people urging us to get on board, not to miss out, because the market is booming.

Yet this advice ignores the fact that if a market is hot, it’s probably too late and clever investors will be looking elsewhere for areas with growth potential.

Secondly, ask yourself where these same people were six years ago when the news was all doom and gloom.

Property investment is the most expensive form of investment there is and we are fortunate to have many experienced advisors and mentors you can rely on who have been in the business for many years.

The stakes are far too high to be entrusted to some fly-by-night operator who will disappear back into the woodwork as soon as growth slows.


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John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.

'The property investment strategy cycle' have 3 comments

  1. Avatar for Property Update

    September 30, 2016 ana

    Contradictory info in this website. While here: it says housing market is declining, in this article Lindeman says the opposite: “Right now, with housing market prices rising almost everywhere….”.
    Who should we belive to?. Funny! Michael Yardney: Your experts disagree badly!


    • Avatar for Property Update

      September 30, 2016 Michael Yardney

      You are correct, experts will always disagree, and I’m trying to present you with a wide range of opinions.
      Having said that the John Lindeman article was originally published over a year ago but our editor chose to republish it because of the main commentary on “experts”


  2. Avatar for Property Update

    April 11, 2014 Peter Fritz

    Such wonderfully succinct and sage advice. This is an article that’s worth reading twice. I’ve always been a fan of Metropole’s level-headed advice and this piece is consistent with that long-held view.


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