Location and Timing

There is an old saying about the three crucial factors in determining value in real estate--location, location and location. Actually, there are also three more factors--timing, timing and timing!

Real estate values tend to go in cycles, with property values reflecting what is going on in the community. If the local economy is doing well, prices tend to increase. During an economic slowdown, prices tend to stabilize or decrease. People who have done very well with real estate over the years have great instincts about when to buy and sell. They have mastered the art of buying when the market is on the way down and selling when it is on the way up, without a lot of concern about whether they made the best possible bargain in the transaction. They understand that investments are long-term, so it may take years for a rental property to turn a great cash flow or for the equity to become substantial. In the real estate business, timing is absolutely crucial.