Famous and super-rich investor Warren Buffett is credited with a quote something along the lines of “buy when everyone else is selling.”
Buffett is also credited with the line “Be fearful when others are greedy and greedy when others are fearful.”
Of course, Buffett probably wasn’t talking specifically about property. But those very wise words could indeed apply to property as much or not more than any stock market investment.
Over the last decade it seems everybody has been investing in buy to let property. It’s fortunate demand for rentals has been rising too, as otherwise there could have been a massive glut of property available for rent. Today, however, it seems that fewer people are buying property for investment, and there are also more and more reports that some landlords are selling.
So does that mean you should join them, and avoid investing in property too? Or even start selling your investment properties too?
We think not. And here are just a few good reasons why we think you should consider taking Warren Buffett’s advice and keep investing in property.
* Property prices are softening relative to recent trends, and in some places are static or even falling. It could be a very good time to make ‘cheeky offers’ …. perhaps to those landlords who are getting out.
* Housing is still in short supply, and there’s unlikely to be mass new building anytime soon. It’s hard to imagine values won’t go up long term. Maybe not as much as in the recent past, but still up.
* Property is still very good value in many parts of the country. In 20-30 years people will be amazed that you could buy a whole house for, say, £100,000.
* Money is still cheap. Chances are it will never, ever be as cheap again this century (and even further beyond).
* The tax benefits of buying and letting property are still pretty good. OK, maybe not quite as good as they were but still good – and better than many other businesses and investments.
* And this is the main reason: The underlying demand for rental property is still very strong pretty much everywhere. Yes, there are some tenants who would rather buy if they could, but renting is still the solution or more appealing for many people.
So, while some people may think that property isn’t such a good buy anymore we agree with Warren Buffett’s overall sentiment: Buying when everyone else is selling could be a very good idea, AKA the time when everyone else is fearful could be a very, very good time – in the best sense of the word – to be greedy.