The best kept secret of rich property investors
Written on the 19 June 2015 by James Cagney
Here is the best kept secret that will help you to make money investing in property...........
Contrary to popular belief the property market cycle is not a smooth curve. There are three separate and distinctive phases in the property market i.e. The "Rapid Growth" , the "Correction" and the "Stabilisation" phase. When you merge the "Cycle of Market Emotions" published by the Russell Group and my model of the property cycle you will find a model that gives you greater insight into property investment. When you understand and apply this using historic data it is the "Best kept Secret:". It is so effective that I have only shared this s secret for over the past two years with my clients.
For example, the last "Rapid Growth" phase in the actual property Cycle ended on the Gold Coast Australia in 2007 / 2008. Many property owners who purchased on the Gold Coast from 2002 to 2008 have been waiting 10 years and more for the market to come out of the "Correction" and "Stabilisation" phases and move back into the "Rapid Growth" phase again. Most property investors do not understand how the actual property cycle works and this is your opportunity to discover the secret. I have not published this model previously because I only wanted to share this with my property investors. However, in keeping with the objectives of the Australian Investment Property Network (AIPN) of "Sharing" and "Mentoring" I have decided to release it to the public.The model may look complicated but you need to understand that property moves along the cycle. Properties go through all three phases over a 7 to 14 year period depending if they are located in cities or in regional areas. The big mistake most people make is they buy property in the same area, where they live so they can "feel and touch their properties". However their home and their investments are in the same property cycle and when the market is in correction or stabilisation do not be surprised that the banks will not lend you more money to build your property portfolio. People buy through "Emotion" and justify their decision "Logically" and often end up justifying their bad decision. The old adage "You never put all your eggs in one basket" is especially true with property. When you diversify you must have properties spread though out the Cycles to have a balanced portfolio.
If you follow the "Me Too" research method and buy property when the market is in "Excitement, Thrill and Euphoria" (when everyone else is buying and making money) you may have to wait 7 to 12 years for the market to the Rapid Growth phase. I advise my clients to buy property when the market is coming out of the "Depression" period and to look where there is "Hope" on the horizon in the local economy. The Gold Coast for example has the Commonwealth Games in 2018 and the construction phase for this is underway. In addition, many of the developers of high-rise apartments stopped building on the Gold Coast in 2008. This was not good for employment and growth at the time but it is the reason why the market is starting to boom because of a lack of supply (supply vs demand) and a good time to buy and / or sell.Using the "Properly Cycle & Cycle of Emotions" model buyers and vendors can estimate where the market is in the Cycle and estimate where the market is likely to go. Vendors can price their property accordingly.and buyers and vendors are now in control and not the real estate agents. I wrote an expose entitled "Do you want to sell your property for a healthy profit or do you want to make real estate agents rich". If you want to know about the dirty tactics and games real estate agents play to get you to list your property and get unsuspecting people to buy property click>>>>GET SMARTER. .
There are other factors that affect the property market like the "Golden Circle" and the "Construction and Maintenance Phases". James Cagney will be happy to explain how these also affect the property market by clicking >>>HERE.
If I had known how the property market actually worked I would have made much more money as an investor over the past 12 years. Of course hind-sight is 20 / 20 vision and now you have the benefit my experience and knowledge. So if you want to know when to buy and sell property by using the Property Cycles and Market Emotions model CALL James Cagney on +61 416 137 645 OR click >>>>HERE.
Now you know the secret when to BUY and when to SELL property!
This is not financial advice. You should not act solely on the basis of the material contained in this article for your investment strategies. Changes in government and legislation occur frequently and without prior notice and financial markets are unpredictable.
This information was written and compiled by James Cagney. The opinions expressed herein do not necessarily represent the views and opinions of his associates including
Thank you to the resources of Terry Ryder, Property Observer, The ABS, BIS Shrapnel, Michael Matusik, Property Monitors, Colliers, On the House, Corelogic, RP Data, Residex, SQM, Herron Todd White, NAB Residential Property Survey, Australian Bereau of Statistics, Peter Wargent, Port Phillip Publishing, Economy & Markets, Harry S. Dent and the many others for the material discussed above.
Author: James Cagney