Imagine you are sitting in your living room on the edge of your sofa with your coffee table directly in front of you. There is just enough light for you to see that your coffee table is empty except for a single item…a beautiful, shiny, cantaloupe-sized crystal ball mounted on an elaborately ornate silver base.
When you look into this remarkable crystal ball for the first time, you are astonished to see that you have the ability to see into the future, and to see everything that is likely to happen next.
Wouldn’t that be incredible? To be able see into the future, particularly when it comes to your investments?
The coolest thing is, if you invest in real estate, that crystal ball really exists. It is called the Market Cycle…and the best part is, it’s not some complicated formula that only a “Trained Investment Professional” can understand. In fact, most people have a basic understanding of the Market Cycle already.
The Market Cycle is quite simply the movement in property prices from one low point up to the next high point and then back down to the next low point.
Typically, there is a plateau period, although sometimes brief, at the top and bottom of each cycle. When the market is headed towards or near a top or high point, we call it a Seller’s Market. When the market is headed towards or near a bottom or low point, we call it a Buyer’s Market.
Cycles can vary in length of time substantially from one low point to the next, or one high point to the next. They can be as short as two to three years, or as long as 15 or more years.
By understanding the Market Cycle, it puts you at an unfair advantage over the uninformed investor. If you know what is happening in the Market Cycle, you will know when the appropriate time is to buy properties to add to your long-term hold portfolio. You will know when to look for properties that can be fixed up and sold for profit, and when you should sit out of the game entirely and let everyone else pay top dollar for properties that are overpriced.
Having an understanding of the Market Cycle is like having a crystal ball for your real estate investments. If you have an interest in learning more about Market Cycles and Real Estate Investing, join us at our next AORE Saturday Monthly Meeting on Feb. 13 at the Savannah Rapids Pavilion. The doors open at 8 a.m. for networking with the 50 to 70 other local investors.
Justin Anderson is a licensed Real Estate Broker in Georgia and Oklahoma, and has been a full time real estate investor for the past 18 years. He is the co-founder of AORE, a Real Estate Investment Training and Education Company with offices in Augusta, Oklahoma City and Philadelphia. For more information, visit AORE.com or email firstname.lastname@example.org.
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