Should property investors cool their heals in 2011?

With the prospect of slower markets in 2011 and certain properties falling in value, I know some investors are beginning to worry about their recent purchase, while others who were contemplating getting into the market are waiting to see the market ‘bottom out’.

Firstly, if you bought a property recently with the intent of owning it for a while, you probably have little to fear. We all know that the property market is cyclical. It has its flat periods and times of small dips, but in the long-term, well-located properties continue to rise in value.

If, on the other hand, you were hoping to get rich quick or hoped to renovate or develop your property and on-sell it for a quick buck, you may be in for a bit of a shock.

In these flat markets there is little chance of a quick anything when it comes to property.

However, if you are looking to buy a property with a long-term perspective, now could be the time to take advantage of what has turned into a buyers market.
Now could be a good time to make cheeky offers and take advantage of motivated sellers.

Sure, the markets may fall a little further – but you’re not ‘buying the market’. I suggest you buy a good property at the type of price that even if the market falls a bit further, you’ve bought well.

But as always, you shouldn’t just buy any property – buy the best property you can, as when the market turns, it will be the better properties – ‘A class’ properties – that will increase in value first, as they are the type of property that’s always in strong demand.

So…

1. Do your research. Look for areas that will have long-term capital growth and will continue that way.

2. Find motivated vendors that will sell you their properties below intrinsic value price.

3. And in particular, look for properties where you can add value. This is the best strategy in the current property market.

If you’re in the real estate market for the long-term you have little to fear. In fact it’s a great time to buy the type of property that you would have to pay more for earlier in the year.

By the way if you want to hear five leading property experts give their forecasts for property for 2011 please click here to download a teleseminar replay.

Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia’s leading experts in wealth creation through property. For more information about Michael visit www.metropole.com.au and www.PropertyUpdate.com.au.