Updated: Oct 18, 2018
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The United States is reaching historical economic highs and it has people questioning what to do with their investment portfolio. It is a good time to consider a couple of questions. Can you be too late to a real estate market? Should I look into other alternatives? These are the exact questions an article posted by Forbes addressed. Yes and no. Here is our take on the current market conditions.
Now is actually a great time to start if investors research which areas are the best and keep the most important factors in mind. Also, market conditions are less influential if you have a long-term strategy and buy right.
If your investment strategy relies heavily on the hope that it will appreciate, it can be more of a speculation than smart investing. If you are not cash flowing in the positive with 20-25% down in an up market cycle, this could be a sign that you have arrived too late. Purchase prices elevate faster than rental income in markets experiencing an up cycle.
It is important to look at the current development compared to existing inventory. If your investment strategy relies on rent growth primarily, short-term investing could be way less of a safe choice, and it increases the the attractiveness of a long-term investment.
In conclusion, you can be too late to invest if you have a short term strategy, but this just means investors need to evolve along with the market. If you have access to a pipeline of value add property, have a long-term strategy, the market has plenty of job opportunities, and investors pay attention to liquidity in the market, market timing becomes way less of an issue.
Turnkey investment firms can be a great way to enter the market when investors have concerns, as long as they properly vet the company they choose. Turnkey companies have extensive knowledge about local sub-markets, have spent years developing relationships to create a pipeline of value add property to their inventory, and their reputation relies on providing safe and consistent returns for their clients.
At Turnkey Property Group, we are able to pass the savings we obtain and pass it on to our clients by pricing our property based on rent to value ratio, which ends up being below market value most of the time. This allows our clients to have a solid long-term investment to add to their portfolio.