How to buy Property… at the Wrong Time!
Most people buy property at the wrong time. The reason why is that they spend so much time waiting until they are sure that it is the right time to buy, that they miss the moment entirely. It is the easiest trap in the world to fall into, which is why almost everybody does. This article will help you avoid the trap.
Firstly let's agree on what is the best time to buy property. If you want to ensure that you will make the maximum investment return, then the best time to buy is when the market is low. Of course the thing about when the market is low is that that is the time when there are fewest buyers.
If you are going to be a successful property investor, then you will have to be a little bit brave. You will have to purchase property when most people are not, because that is the point at which the market is lowest. Let's not underestimate that bravery, because it involves doing something that goes against our natural human instinct. It involves being different.
Human beings naturally feel safety in numbers, just like any sociable animal. During a property boom, for example almost everybody and his uncle are buying properties left right and centre. Purchasing property at that time feels like a real 'no-brainer', because everybody is doing it so it must be right. But in terms of property investment, this is probably going to be the worst time of all. Because when everyone is buying, the market is at its peak or close to it.
Of course, there are degrees of ' Right Time'. There may be a decade between the absolute best time to buy and the absolute worst. The Tenerife property market is actually a perfect example to illustrate the point.
The fact is that last year there were fewer buyers in the market than there are this year. All statistics, both public and private will agree on this. So we can say retrospectively that last year was a better time to buy than this year because the laws of demand and supply dictate that as demand rises, prices must follow.
We can also see that this year there are other market factors that have improved demand for property in Tenerife. The largest of these is the increased tourism that the island has seen. Last summer and winter seasons were close to 30% up on the previous year, and even now hotels are packed solid as tourists shy away from countries like Egypt. The more tourists there are, the more property buyers there are: there is a direct correlation.
That's not to say that this year is a bad time to buy, because the market is ascending and will continue to do so for several years. The property market moves in a cycle and it takes a few years to move from a trough to a peak.
So if we compare a buyer from last year, a buyer from this year and a buyer from next year and we assume that they all sell their properties at the same time, at the top of the next peak, we are almost sure to see their profits stack up in the same order. Last year's buyer will make more than this year's, who in turn will make more than next year's.
Those who make the most money in property investment are the bravest and most astute. Buyers last year were those who understood how the market works and were prepared not to follow the pack. People who are buying property in Tenerife this year will take reassurance from the fact that many more people are purchasing property at the same time. But the cost of that reassurance is a slice of their eventual profits.
Next year's buyers will probably have little hesitation in purchasing a property in Tenerife because so many other people will be doing so as well. The reassurance of having more fellow buyers will cost them more in profits, and so on until we reach the peak of the property market. At that time almost everybody will be buying, and almost everybody will be absolutely sure that it is the right thing to do… and almost everybody will be wrong!
If you're interested in purchasing Tenerife property, you really should be buying as soon as you possibly can. Of course, you will feel more reassured if you purchase next year and even more so the year after, but the cost to you will only get larger and larger. And if your budget remains the same, then the property you purchase will get smaller and smaller! So do yourself a favour, take a look at some of the fantastic properties you see around you here and make the decision to buy one.