Most real estate buyers are terrified at buying at the wrong time. This fear is not limited to just real estate, as it applies to electronics, tickets and any purchase you make. If you buy slightly above the price you could have bought it previously, it is perceived that you overpaid and thus you made a bad deal. The reality is that the market is always moving in one direction or another. Trying to time the exact floor is very difficult. What you may feel is a bad deal may still be a good one, but your timing and perspective may be a little off.
In real estate, for every pro there is likely a con. If you are seeing homes in your area selling quickly with prices appreciating rapidly, you may think that you missed an opportunity. You may have missed an opportunity to buy a cheap rehab and flip it for immediate profits. You may not have considered renting an option, but with demand still high, this could be the strategy that makes the most sense. Regardless of when you buy, you can find a plan that works for your current situation and what you paid for the property.
If you buy on the way up, there may still be room to grow. There are many investors who failed to buy Apple or Microsoft stock years ago because they thought they were getting it at the wrong time. Well, years later we see that you could have still bought months after it became hot and made a handsome profit. The same approach can be taken with the real estate business. Home sales are up nationally, but demand appears to be lacking. This will continue to push home prices higher. If prices continue to rise, you may have to rent for a year, but eventually you will see the profit you desire.
Buying on the way up is not as bad as buying on the way down. With buying on the way down, you have no idea where the floor is and it could take years for the market to turn. When buying on the way up, you still have room to grow and are in possession of a valuable asset. This asset can be used to rent or sold for profits if you really needed to. The alternative is buying on the way down and figuring out which is the best way to take a loss. Home prices were near historic lows just a few years ago. Buying at that exact time was not an easy thing. There is still plenty of room for values to grow and we are still only just beginning to see our assets recover.
If you are worried about always trying to get the lowest price or best deal, you will have a tough time investing in real estate. Getting the best deal is always the goal, but sometimes you can’t always get the perfect deal. There is money to be made in any market. Regardless of where home prices are. Evaluate each deal on where the market is, not where it was a few years ago.