Can you “time the market?” Its the age-old question that multifamily investors ask, and the typical response is: “you should always buy low and sell high.” However, the best answer is that if you take a longer term approach… market timing really doesn’t matter.
First, I believe that whether its a Seller’s market or a Buyer’s market… you can always find a deal. Regardless of current market prices, there seems to consistently be about a handful of Central Denver transactions every single year where people look back and say, “That’s a building I would have bought if I knew it was going to trade at that price.”
Second, if an investor has a long term approach, you won’t have to wait for the perfect moment to enter the market. One of the greatest benefits of owning real estate is that real estate tends to appreciate over time. Appreciation isn’t guaranteed, but the the reality is the market generally has an upward trend.
Obviously you can always look backwards and it’s a lot of fun to say, “Wow, I wish I would have bought a building in 1985.” Just remember that every year there are deals that make good financial sense to purchase and those transactions end up selling at prices that are lower than average for that particular year/market.
I would encourage you to thoroughly research any given market which will lead to a detailed understanding of the marketplace. Knowledge is power and careful planning will help you discover how you can find the best apartment building to purchase.
~Kyle Malnati, Partner/Shareholder
Madison & Company Properties
Madison Commercial Properties
1221 South Clarkson Street, #300, Denver, CO 80210