Time in the Market vs. Timing the Market — An Economic Take on Real Estate Investing

You’ve probably heard the phrase “buy low, sell high” related to investing in the stock market. It’s also a phrase that resonates with a lot of real estate investors. However, this harmless strategy often leaves investors thinking that timing the market is key to success.

Many real estate experts advise against trying to time the market. Much like other asset classes, real estate prices are subject to ebbs and flows based on a variety of market pressures.

Regardless of how markets change, the overwhelming consensus is that it's more advantageous to buy-and-hold with a longer time horizon to optimize returns and minimize risk.

While experts may have their predictions about where markets are headed, the truth is that nobody really knows the exact route real estate will take. That means that trying to time the market is a major gamble.

Alternatively, a more prudent investment strategy would be to get into the market and invest long-term to reap all the rewards real estate has to offer. Let's look at some real-world data that validates the power of a buy-and-hold strategy.

How Does a Buy-and-Hold Strategy Work?

To understand the power of how time in the market is more important than timing the market, it's important to dig in and really analyze the financials.

Doorvest makes it easy to review both qualitative and quantitative data. On each home profile, you can see how the potential investment is forecasted in key metrics over both short and long periods of time. You can also compare conservative projections against historical data to be sure your investment meets your overarching investment criteria.

Let’s examine the potential investment of a single-family home in Galloway, Ohio. The fair market value for the property is $260,000 and it can be rented for $1,920 a month.