Real estate investors choosing to sit on their hands in wait for a market crash will be sorely disappointed. Investors must adapt their strategies for any and everything the real estate market brings to the table, favorable and otherwise. We can always wait and hope that conditions will take a turn for the ideal, but that’s not a reliable investment method.
Here’s the simple truth: investors can’t afford to wait. Here’s how the waiting game sabotages your future wealth!
4 Reasons the “Wait and Hope” Mentality Works Against Real Estate Investors
Reason #1: Inflation is merciless.
The only things you gain from waiting out the market are missed opportunities. Very simply, if you’re not investing, you’re losing money. Relying on a savings account or other investment assets doesn’t work – they’re often vulnerable to inflation. Inflation has been significantly higher in 2022 and 2023 than in at least the past twenty years. We’ve seen inflation rate highs up to 9.1% (June 2022). Throughout 2023, the inflation rate has steadily decreased, but it was last at 5.0% in March.
To put that in perspective, look at the inflation rates from March of the last four years:
| Year | Inflation Rate |
| 2020 | 1.5% |
| 2021 | 2.6% |
| 2022 | 8.5% |
| 2023 | 5% |
Inflation rates are decreasing, but we’re nowhere near pre-pandemic numbers. The Fed’s efforts to raise interest rates to curb inflation have only had a limited impact.
We must point to real estate investment as the wisest way to protect your money from inflation, which will diminish your wealth and buying power. Because real estate hedges against inflation, you better secure your wealth by investing in it.
Reason #2: The market is cyclical—but not necessarily predictable.
There’s a reliable cycle to the real estate market. This may lead you to believe you can wait out any unfavorable cycle period. We won’t say that’s never true, but it’s uncommon. Each stage can last years. Due to limited inventory, we’ve seen the current “expansion” stage drag for over a decade!
Truth be told, even the best experts and analysts have trouble predicting what’s next for the real estate market. We can guess based on trends and historical data, but there’s often room for surprises. A prime example comes from the COVID-19 pandemic. Doomsaying was rampant. What we saw instead was a robust and competitive housing market.
The trick isn’t to outlast parts of the real estate cycle that don’t suit you. It’s to pivot your strategy to take advantage of existing conditions, no matter what.
Reason #3: The earlier you invest, the more wealth you build.
In the world of real estate investing, time is of the essence. It’s just math. When you start earlier, there are more months to glean rental income. More time means greater property appreciation. There’s more room to save, buy more properties, and craft a diversified portfolio. The more time, the bigger it can get!
It’s a simple point that’s often overlooked. Too many young, inexperienced investors hesitate to begin when they are, in fact, in a prime position to reap the biggest long-term reward from their rental properties. Young or old, you don’t have any time to waste.
Reason #4: Hoping for a return to a past norm is wishful thinking.
We all got tired of the phrase “new normal” during the pandemic, but the concept has merit. We’re constantly facing new normals. None of us can go backward. Whether or not we want to admit it, the financial, technological, and logistical landscape as we know it is drastically different from just last year – not to mention the last twenty years!
We’ve been in business long enough to see the changes. And we’re here to tell you the ugly truth: what once was is not coming back. The world is different. The sooner investors embrace what we have now, the better off we’ll be. Instead, we see plenty of people wishing for days gone by.
No, things aren’t as easy as they used to be.
But in hoping to recapture the glory days of real estate investing, you’ll find you’ve missed the opportunities around you all along. Don’t fall prey to wishful thinking – live in the present.
Invest with the ones who have turnkey real estate down to a fine art – REI Nation!
