Everyone needs to be aware of this golden rule when it comes to buying a profitable investment.
In the last 30-years Australian homeowners have achieved incredible wealth through property. Infact, in the March 2021 quarter, Australian household wealth reached a new record high of over $12 trillion with 84% of that wealth generated as a result of owning land and dwellings.
When you consider the many market fluctuations that have happened during the last three decades, it becomes evident that those who made the maximum amount of profit are those that were able to time the market effectively.
One of the golden rules of property investing is the 70/30 percent rule. As we all know, the property market does not grow consistently at the same rate every single year. Typically, the market moves in fluctuating cycles, with each cycle lasting about 10 – 15 years.
The most important time to invest in property is during the growth phase of any cycle. This is the time when most of the growth in property value will actually occur, however this phase sadly only accounts for about 30 percent of the time in that cycle.
In context, during 2020 I and my team of dedicated data scientists quickly recognised all the signs of a pre-boom market, meaning that the property market cycle was about to enter the 30 percent growth phase. Because of our quick action and detailed data insights, we were able to help our members acquire investment properties that have now grown exponentially, allowing them the freedom to expand their portfolios and better prepare for retirement.
Investors can accelerate their wealth significantly by identifying the point at which the property market turns into the growth phase. In doing so, you can really take advantage of a market upswing to further your wealth goals.
Join me and co-Founder Scott Kuru as we take a deep dive into this and many other property investment strategies at our free online Masterclass. We will showcase all of our property market predictions as well as how to pay off your current mortgage in 10 years or less.
Lianna Pan is one of only 2,997 qualified Actuaries in Australia and is Founder & Director of Research at Freedom Property Investors.