The key to getting property investment right is not just buying the right property at the best price, but maximising your 'cash flow' once you have bought it. Provided your property is cash flowing (making you money each month after paying all the bills) does it matter if the price is falling?
Consider the situation in 1992, which was the last property crash; house prices fell by as much as 20% in some areas but the national fall was only 4% which meant some areas actually rose during the last crash.
In 2008 we are told house prices have fallen by as much as 16% but in some areas, like Edinburgh for example, prices are still rising. Therefore the 'crash' is now being seen as a 'price correction' by some commentators and so the fall in prices may not be as dramatic as in 1994.
In 19942 there was high unemployment, high interest rates (15%) and high inflation.
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In 2008, we have the best employment figures we've seen in over 30 years, inflation is around 3.3% (depending on which figure you take) and interest rates are still low.
If you had ignored public opinion and actually bought property in 1992, you would be sitting in a property worth, at the very least, twice what you paid for it, probably much more.
In 2008, we could be on the verge of experiencing another property boom that could surpass them all. Imagine buying a property today and watching it achieve the same rate of growth as we saw between 1992 and 2007. Over the next ten to fifteen years, you could benefit from a comfortable passive income that could easily support you and your family, whilst at the same time watch your capital grow in value.
So is this another 1992? We think it is, but without the other negative economic indicators we saw 14 years ago; which means the dip in prices will probably not be a severe or last as long as in 1992 - 1994. And the good news is, it is far easier now, than it has been for the last fourteen years, to negotiate significant 'below market value' discounts.
At Property Mentor™ we always buy property, regardless of what the market is doing, because we know how to achieve positive cash flow. However, we believe that the next twelve months offer fantastic opportunities to start building or expanding your existing portfolio.
How many properties should you buy? Our opinion is 'as many as you can' but the decision is yours. Do not let yourself feel pressured by others into taking the plunge until you are ready. To help you make the decision to buy or not to buy, make sure you take advice from the right people - those who have built a portfolio and know how to buy below market value and achieve positive cash flow.
If you would like more advice on the current property market and the opportunities available, our team of experts are more than happy to help. We are 100% educational and our aim is to give you honest dependable advice, so take the step and overcome your fears. Things are about to change.