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When it comes to real estate investing, the best time to begin was years ago. However, the second best to begin investing is now.
Many would-be investors find themselves waiting for the ‘perfect moment’ to enter the market. However, what they do not realize is the best time for them to begin investing is right now. After all, by investing early, you maximize your chances of experiencing extra appreciation. Yet, countless real estate hopefuls find themselves waiting for the market to grind to a halt and give them an easy opportunity to get started. Why?
To help you understand why these individuals are delaying their investments, and why you should not follow their example and start investing early instead, let’s take a look at the bigger picture.
But first, if you want to start investing early and do not want to waste another second, click the link below to book a free strategy call with our team today.
Why Do People Wait to Begin Investing? Why Aren’t They Investing Early?
One of the tragic facts of the real estate market is the fact that tons of potential investors each year find themselves watching the MLS (Multiple Listing Service) waiting for prices to drop before entering the market, only to find that the prices are not falling as low as they would have hoped. So, why do they wait at all? Why not start investing early?
Well, unfortunately many people find themselves focused on the housing prices they remember from when they were younger. In 2002, the average price to buy a home in Canada was $171,033. However, over the years, housing prices have steadily risen and now the average house sells for $746,146. That is over 430 per cent higher than they were 20 years ago.
While it is understandable that people will miss the days of lower housing prices, the fact is that real estate consistently appreciates in value and that is the primary appeal of real estate investing for many. So, by waiting for the market to settle, these individuals are often missing out on the appreciation that is occurring right now, and slowly pricing themselves out of the market.
Don’t Price Yourself Out of the Market
One of the worst things you can do as a potential investor is wait too long and price yourself out of the market. During periods of rapid appreciation, housing prices can make massive leaps that are great if you have already bought into the market, but if you have been waiting to enter your down payment may suddenly no longer be able to buy the same houses. Or under more extreme circumstances, you may wait so long you can no longer afford to buy at that time.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
The Benefits of Investing Early
Now that we have established why waiting to begin building your real estate portfolio is an unreliable strategy, let’s take a look at why investing as early as possible is reliable and profitable for most investors.
As we know, by buying property, you are buying an appreciating asset that will continue to grow as time goes on. That means by buying a hose sooner rather than later, you are giving your investments more time to appreciate and increase your personal wealth.
Another important thing to consider is that investing early does not necessarily refer to buying rental properties. Simply buying your own home is one of the largest personal investments you can make in your life, so it is important to do so wisely.
For example, some buyers wait to buy their first home because they are unsure if their family is going to grow in the coming years. So, they decide to let their down payment sit in the bank doing nothing and wait until the ‘right time’ to buy. However, if that person decided to buy a home today instead when the time comes that they do need a bigger house, that home will have likely appreciated enough that they can afford a much larger home than they would have otherwise been able to afford.
Another great strategy is house hacking, this is when a homeowner rents out part of their primary residence in order to generate additional income from their own home. Some people do this by renting out individual bedrooms, others do it by offering basement apartments. Alternatively, some savvy investors plan ahead and buy duplexes. Then while living in one of the units, they rent out the other and use their rent payments to cover part or all of the mortgage so that they can save money to move up to a larger home later on.
Inflation vs Investments
Another reason you should invest as early as possible is the reliability of real estate as a means of beating inflation. The average rate that properties appreciate year-over-year are often reliably higher than the rate of inflation – regardless of financial hardships happening in the world.
If your money is simply sitting in your bank account, even if it is a high-interest savings account, you are leaving yourself open to letting your savings get eaten up by the rate of inflation. This means each year your money is effectively worth less than the year before it.
However, by buying real estate, you can take advantage of the appreciation and equity your properties will build and if you need the money you’ve earned for something later, you can simply sell the property or refinance in order to take out the equity you have created and use those funds accordingly.
Should You Consider Investing Early?
So, the question remains, should you be investing early into real estate? Our answer is yes.
By buying property, regardless of whether it is a long-term rental, short-term rental, fix-and-flip or simply buying your own home, you are taking advantage of one of the most reliable ways to build meaningful wealth and work towards true financial freedom.
So, if you are ready to begin your real estate investment journey give us a call at LendCity and we will gladly help you get started. We can be reached at 519-960-0370 or you can visit us online at LendCity.ca