Investing, whether index funds or real estate is TIME IN THE MARKET, not timing the market. No one has been able to consistently predict the ups and downs of the market. If someone was able to do that, they’d be paid handsomely for their crystal ball!
People often ask me, “when should I invest my money?” My reply is if you have money, you should invest it. People always say that they’re waiting for the next recession to hit, then they’ll pull the trigger. I will admit that I was guilty of this myself. My two other partners both bought properties when I was waiting for “the recession”, it never came and property prices have MORE THAN DOUBLED by the time I got my first property. What often happens is when the recession does hit, they will think it’ll go lower or now’s not a good time. That’s human nature! During a recession, there is a credit freeze which means even if you were crazy enough to buy, no bank will lend you money.
During a recession, people may lose their jobs and if they can’t keep up with their monthly obligations, the banks will foreclose their properties. Where do people go when they lose their homes? They RENT! During the 2008 recession, rents stayed the same or even went up (huge influx of renters)! As long as you have CASHFLOW POSITIVE properties that pay for themselves, you will have a flood of renters to pay down your mortgage for you. Time IN the market is how you will accumulate equity in your home and the fact that the properties cash flow means you won’t have to worry which phase of the real estate cycle we are in. You just ride it out during the bad times and enjoy the fruits of success during the good times. This is a recession proof strategy since people ALWAYS need a place to live.
As a matter of fact, we are looking forward to the next recession or real estate correction. That is when we will grab even more properties while the unprepared public is panicking and selling/losing their homes!