TIME IN THE MARKET, OR TIMING THE MARKET?
Are we playing checkers, chess or a game of semantics? We’re not really playing at all; the image is simply to provide a visual. The truth is that we’re really pursuing our financial freedom, and inviting friends and family to join us.
For those of you who love “the bottom line,” it’s ridiculously simple. It is truly your move. Some will sit on the sidelines—doing nothing is actually making a move. Some will move very safely, very carefully. Some will take wild risks.
Where are we on that spectrum? We take in all the information we have at hand today. We recognize no one has a crystal ball—God forbid that there might be a third wave of Covid, or even a new pandemic that none of us can see coming!
Then we analyze the trends and the data. Nope, we’re not economists. But we can think and learn and assess the problems and opportunities.
There was a fantastic article in the news last week, suggesting that now is the time to buy in Calgary. Maybe yes, maybe no—only 20/20 hindsight will tell us for certain. And this article launched a little fire-storm of debate!
Here’s the thing: it’s your move. Wait, look for good deals, take any deal in any neighbourhood, or find a good deal, in a good neighbourhood with multiple exit strategies. No one else’s opinion matters. Your choice will lead to your consequences and/or your financial freedom.
For us, this is an interesting time in the Calgary market. Can we say for certain that Calgary is at the bottom of the market cycle? Can we say without a shadow of doubt that these are the lowest prices that we’ll see for years?
Absolutely NOT.
But it’s not our ultimate goal to TIME the market. There will always be unpredictable events that raise, lower or clobber the real estate market—for a while. And if we were just Flippers, our choices would be more critical. One exit strategy means a lot more risk!
It’s our goal to spend TIME IN the market. We love BRRR projects, Buy and Hold and Rent to Own. Ideally, we love to buy a house in a good neighbourhood where any or all of these methods could work as our exit strategy. And shamelessly, we love positive cash-flowing properties.
If we spend time in the market, we WILL have that positive cashflow and that mortgage paydown for the time we hold the property. Appreciation is never guaranteed, but we all hope to have that icing on our cakes!
Forced appreciation can happen in almost any market. That means we buy a property that is a bit ugly—or a lot ugly. We fix it, then we make it pretty. If we renovate on a smart budget, the value of the property is forced upwards AT LEAST as much as the reno budget. Our time in the market then measures the new value of a renovated house, with better tenants, or better Rent to Own buyers, and most likely better cashflow.
If we buy today, renovate, then find good tenants in late spring early summer—we are spending time in the market. If the lowest prices are in December of 2021, and we wait for that time, we will miss out on 6 months of cashflow and mortgage paydown.
Only you can decide where your priorities are for your financial freedom. Each investor is responsible for their decisions, and their risk tolerance. Only you will know if the numbers make sense to invest today, or June, or December. Time IN the market, or TIMING the market? It’s your move!
Connect with us at any time to chat about real estate investing. @MtnEdgeRenovate @MtnEdgeDevelops.
