Is Timing the Market Really A Thing in Real Estate Investing?

Over the years, the real estate market has been performing strongly, leaving so many potential investors wondering whether it was too late to invest in this lucrative market. It is understandable why a person would feel left out, but, real estate investing has not stopped and will not stop anytime soon. There are numerous opportunities in the real estate industry that you can use to get started in real estate investing, especially in Cleveland, Ohio where the market could not be better for reasoned and entry-level investors. Given the massive potential of this industry, someone would ask, when’s the right time to invest in real estate?

Growing up, I have always heard the phrase… that timing is everything. Most investors will make decisions purely based on intuition, after all, where is the time to get familiar with all the terms of real estate investing. Therefore, many will invest with a little understanding of the market cycles. Understanding what strategy you can use that will work best for your financial situation as real estate goes up and down based on market conditions is still one of the most stable investments historically.

Most smart investors understand the concept of countercyclical investing. Here, an investor will aim to acquire assets counter-cyclically in the markets that have not experienced recent booms. Basically, this concept emphasizes “being fearful when others are greedy and being greedy when others are fearful.” As an investor, it important to first understands your market. This will give you better knowledge to understand the recurring relationship between the different stages in the market cycle. When you understand your market, you will then be able to figure out the best timing where you can maximize the returns on your investment.

While in perfect markets counter-cyclical concept will apply, it is not always the case. Timing the real estate market is perhaps one of the most misunderstood concepts and the truth is, serious investors, know the loopholes in their market that they can take advantage of to create wealth at any point in a cycle. That is not to say that timing doesn’t matter, it definitely does, after all, you wouldn’t want to buy your real estate property at the peak of a boom and then wait three to four years before the property gains its value again.

While timing the market matters and is a crucial factor, successful investors argue that timing isn’t really important, because, some investors will do poorly in good times and even much worse in bad times, so market timing seems to be of little to no benefit to them.

Imagine a situation where you have two investors, investing in the same market at the same time. One makes a successful investment while the other doesn’t, in fact, he loses his money. This is a scenario that happens in our everyday life and it suggests one thing; that it is not the external factors or market forces that determine whether we make money or loses it, it is our inherent desire to succeed while at it. That is not to say that market conditions do not influence our investments, in fact, they do at a larger scale, but the drive inside us is the one that makes or breaks us.

Someone might argue that knowledge differentiates between these two investors but it is more than that. Yes, being knowledgeable in your market area will put you ahead in your game, but even that alone isn’t enough to make you a successful investor. One thing I have come to accept and appreciate about real estate investing is that what makes a person successful in this field is their mindset- it is all about how you think about money.

But above all, knowledge is your best asset while alone it won’t make you a savvy investor, it will help you understand how your market work, and that in itself is a major move that will set you apart from the crowd.