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When to Buy Low and Sell High

Posted Tuesday, September 11, 2012

All investors everywhere in the world are motivated by one single purpose; to maximize returns on their investment and reduce the risk level associated with that investment. If an investor can buy an item and after a short while sells it at double the price well they are in business and good to go. If for any reason their investment loses value and they have to give it at a dollar less they loose money. It is very crucial for any investor to carefully analyze the market before they invest. This helps them determine the risks involved and whether the risks are worthy taking.

A good understanding of forces of demand and supply is important to help in determining the general direction of property prices in any market. Knowledge of other factors at play such as buyers’ level of income and their purchasing power is very vital in determining the prices and availability of real estate property.

When can one actually buy low and sell high in real estate property market? The most ideal time is when prices are tumbling down. Prices fall is precipitated by many factors. One such reason is when people are walking away or they have adopted a wait and see attitude towards the property market due to lack of credit which lowers their purchasing power. At this time one should take the advantage of the low prices because of low demand and purchase massive property.

Also during political uncertainty, usually during election periods demand for property goes low because investors hold their money to see what shall happen after polls. At these times a wise investor should go ahead, risk and buy the property. When can I sell my house at a high price? After political dust has settled, financial firms and people become more confident to give and take credit. This increases the credit available in the market and therefore purchasing power in the entire market. People are more willing to invest their money as opposed to holding liquid cash. As a result, demand outstrips supply and therefore prices skyrocket. This is the right time to sell my house.

Another such time when one can sell their house high is when the economy is stable. At such times more people have high purchasing power and are more willing to invest since the risk is not high. This automatically raises the demand against the available property supply and hence the prices. Therefore one should always be on look out to monitor the prevailing circumstances in the market so as to know whether to invest or sell.