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What is the “Time in the Market” theory?

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The “Time in the Market Theory”, asserts that all areas of the housing market grow at the same percentage rate, over long periods of time.

The theory suggests that investing is profitable, no matter where you invest, because housing prices double every eight years.

The truth is that this theory is incorrect.

Past growth should not be used to forecast future growth, because market conditions are always changing.

Real property price growth lies in continuously improving features and being in the right location.

Price changes can happen pretty rapidly and can vary substantially, from one location to the next.

This is not a negative but is actually, one of the greatest benefits of property investing.

Investors can borrow most of the purchase price and leverage the growth, on the entire price of the property, not just a small percentage.

Being able to use borrowed money to achieve this is a unique feature of property investment.

The trick is to understand the timing in the market, where to buy and when to sell.

 

 

 

 

 

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Marlene F Liontis