Location is important, don't get me wrong. But it's not the number one factor in getting the most out of your home investments.
Timing to the real estate market is like the wave to the ocean. You can be Michael Phelps and swim against the ocean current. And because you're an 8-time Olympic gold medalist swimmer you'll go far, but not nearly as far as if you were coasting along the direction of the waves--with it, not against it.
Timing seems like a vague idea at first. "Where do I start?" Timing is knowing where the market currently is. Know what the market is doing, is it going up or down? It is fairly easy to know this. Routinely check the supply and demand. Existing home sales and median prices are major indicators of where the market is.
Bill O'Neil, founder of investors business daily and perhaps the most successful growth investor in the last fifty years, shares one of his biggest secret in the stock market "Invest when the market is in an uptrend". He goes on to say that three out of four stocks (no matter how strong the fundamentals are) go down if the market is in a downtrend. Why fight the current?
And there are exceptions, of course. This is not a one size fits all formula. People have different needs and goals. And even when the market is down, there are sub-markets that outperform the others.
The biggest difference with a home versus a stock is that homes are a necessity, we need roof on top of our heads. But wouldn't it be nice if we can hit two birds in one stone? Get the best investment and the best roof over our heads. It can be done.
Many buy homes and just sit on it forever. If you're planning on staying for a very long time in your home, copy Warren Buffet's "invest and forget". This is where location plays the biggest role.
If you can, choose an area where you stand the best chance of making future equity. Where you really feel safe and at ease with the surrounding area. Hit as many birds in one stone. Patience is key.
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