Why Economics Should Not Be Your Only Property Investment Guide

Finding The Property BottomEconomics is a useful subject to learn, everyone should take some time to learn even the basics.

For those who don’t, the world can seem like an awfully confusing place at times.

In any one day you can listen to the news and be left wondering if the outlook is good or bad. Consumer spending might be up one month because more people went shopping in the January sales and down when the weather wasn’t good.

Economics is good for helping us understand why these things happen.

The weakness of applying economics to property investment is that just like any other subject you can be certain that every theory and every statistic you come across is open to scrutiny. There will be gaps that cannot be closed – in the meantime the clock is ticking…

At any one time you can find a statistic that will either convince you to invest or persuade you not to.

As human beings we are all looking for the right answer to bring us closure and comfort. Economics will not do this for you if you are a property investor and here’s why…

Economics is often applied to make the case for investing in a particular country. This is because when GDP is climbing, the population is getting richer and the banks are offering great finance  deals, then it is our understanding of economics that tells us this.

Yet there are times when economics makes us think a little too much and to question an opportunity that presents itself.

Think back to how it was with the Florida property market in 2009. Not too long ago but if you happened to have been an investor studying the economic numbers at the time you will have soon missed the bottom of the market.

Economics won’t tell you when the bottom of a property market is arriving, it will only help you understand when it arrived and passed you by.

Recessions come and go and using economics to  understand market cycles rather than being distracted and hoping for all the pieces to fall into line will give you the best chance of maximising your capital growth.

What are your thoughts? Please leave your comments below:

Kind regards

Loxley McKenzie
Managing Director

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