Are you looking too hard for your next real estate investment?

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Whether markets are depressed or markets are on a high there will be an abundance of potential real estate investments for you to consider in the future. Whatever type of investment, budget and location, at any one time there will be more than enough for you to look at. However, do some investors look too hard for their next real estate investment?

It may sound a little bizarre to suggest that some people look too hard for their next real estate investment but the reality is that many investors do lose patience the longer they go without closing a deal.

Patience, patience, patience

There are times when a real estate market looks particularly attractive and many investors are keen to take advantage. However, when looking at an individual real estate market you also need to take into account not only the local economy but the worldwide economy. We only need to look back to 2008 to see the collapse of the worldwide economy which decimated economies around the world. Even though individual real estate markets may have looked attractive on a stand-alone basis, the economic support was not there and potential buyers chose to watch from a distance.

It is not the quantity of real estate transactions which you can complete but more the quality of those which you choose to pursue which will make or break you.

Tracking investment trends

They say that the stock market looks nine months ahead to give valuations for today which reflect an individual company’s prospects, the local economy and the worldwide situation. The real estate market is very different because traditionally it does not turn as quickly, it is nowhere near as volatile but it can still be difficult to forecast when investment trends will turn. In reality you are as unlikely to buy at the bottom of a real estate market downturn as you are to sell at the top. However, if you buy nearer the bottom and sell nearer the top there is the potential for a lucrative business model.

These are the occasions where many real estate investors choose to drip feed their funds, whether by buying bricks and mortar or shares in property funds, allowing them to increase their exposure on the way down. Indeed, many investors will also further increase their exposure on the way up in the knowledge that the market has turned. However, in this scenario it is vital to have a foothold in the market with the opportunity to average down and average up when the market turns.

Choose a strategy and stick to it

We all have different strengths, we all have different personalities and if you find a real estate investment strategy which works for you, then why not stick with it? If you have a particular interest in the residential buy to let market then why would you branch out into the commercial property market? You need to feel comfortable in the markets in which you operate, you need to feel comfortable with your assets and above all you need to have a feel for the market.

As the saying goes “fools rush in where angels fear to tread”.

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