Making the decision to invest requires that several factors are considered first, such as the socioeconomic situation of the market in which you plan to invest.
It is true that there are periods in which investment returns, in some areas, may not maintain stability, but this financial behavior is not usually permanent.
It is important to diversify investment sources in various types of assets, to maintain a balance in our income at all times of the year.
As we mentioned in other content on our blog, investing in Blue World City is one of the safest investments you can make, even in times of crisis.
In this article, we will tell you in more detail what is the best time to invest and why you should do it in the real estate sector.
How to choose the best time to invest
Trying to predict the movement of the markets can be complicated, especially in the short term, so an investment strategy is required that adjusts to your financial objectives and protects your money.
There is no exact formula, it changes depending on the country, time of year, sector in which you want to invest, among other variables.
To choose the best time you must carry out a series of steps, which will help you determine whether it is optimal to invest or wait for conditions to improve or, in any case, choose another option that provides greater returns and security.
1. Determine the amount to invest
It might seem logical, but in many cases the target market or financial product is thought of first, rather than a budget that includes all the income and expenses that have to be made.
On many occasions, the money comes from extra bonuses, for example, the Christmas bonus, an inheritance, or a certain amount that was destined as savings for retirement.
Determining the capital that will be allocated to the investment will give you a guideline on what type of investment to make because the same amount is not required to acquire cetes or investment funds as for the purchase of land or commercial premises.
2. Thoroughly investigate the current financial market status
What can provide good returns today may not be the case tomorrow, as stocks are constantly changing.
It is essential to consider the economic environment, as well as the historical behavior of the assets in which you have an interest, always seeking to diversify the investment portfolio.
Some countries suffer financial crises in certain sectors as well as companies, so it is necessary to carry out a thorough investigation of the company or the market in which you want to invest.
If this is stable for a considerable period of time, the percentage of profits is commensurate with the level of risk and there is sufficient capital, the opportunity to invest should not be missed.
3. Choose the financial product or activity in which to invest
Taking into account the budget and the financial stability of the market where you want to invest, it only remains to define the assets. For this, you must take into account the investment risk factors, as well as your age.
Among the main types of investment are:
- Fixed income investments.
- Equity investments.
- Investment in real estate.
- Investment in the stock market.
- Investment in currencies.
- Investment in raw materials.
Following the recommendation of the experts, the younger the person can invest a greater part of the capital in variable income assets, on the contrary as one gets older it is recommended to allocate a higher percentage to fixed income assets. Using the Rule of 120, performing the calculation will be easy.
To talk about this topic in more detail, we have prepared an article about it: types of investments according to your age.
Why Invest in Real Estate?
The parable of the skinny cows and the fat cows – used to designate times of scarcity and bonanza respectively – suggests that there are times with better income than others and that to invest in the real estate market in particular you have to wait until you have a large capital that allows you to make a purchase.
This is partly true, since investing when we have enough capital to not compromise our income is ideal, but not decisive.
There are options that allow you to acquire assets through financing, real estate crowdfunding, or payment plans, to invest safely even without having a large capital.
If you opt for this, it is important to consult certified specialists in the real estate industry to find the place you need for the project you want, as is the case with BMF Inversions, a leading company in real estate investments in the main cities of the Mexican southeast.
One of the benefits of investing in real estate is that it protects your capital from inflation, in addition to building equity for the future and generating a considerable return on investment.
Investments according to the time of year
The ideal time to invest in real estate is when we want to diversify our assets into assets that generate safe returns, as they are medium-risk investments with a high-profit margin, especially if it is acquired in an area of high capital gain and in pre-sale.
However, there are better times than others during the year to enter the real estate market, which we will talk about below.
Beginning of the year and spring
The months of January and February are usually full of purpose and desire to venture into new projects.
Real estate companies at this time register a drop in their purchases, so it is a good time to take advantage of the offers, in addition to having less competition to acquire a certain land.
Related to vacations and rest, this time of year presents – above all – an offer of residences to spend the summer or vacations, as well as land in quiet cities or suitable for retirement.
If you are looking for land in a residential area to vacation, it is a good time to check available options. Especially if you want to acquire a property that allows you to have a place to vacation, and with which you can earn an income for the rest of the year through rent.
It is important to consider the growth potential of these lands according to their location, sometimes the advertising is focused on those that are near the sea or quiet places, but there are also commercial destination options that at this time – not being the spotlight – they have deals you can take advantage of.
In 2015, the BBC World Service published an article titled Why do major economic crises occur at the same time of year? —Which is still in force— in which it is explained that September is the month in which financial markets exhibit downward behavior.
The so-called “September effect” is responsible for a sense of urgency to accumulate or recover assets. This is an advantage for those looking for land at a good price, as many owners want to sell, to get cash this season.
It is also an ideal period to start looking for purchase options once the Christmas bonus and the Christmas season arrived.
The extra income received at the end of the year is an opportunity to invest, the advice of financial experts is that the bonus is used to save or acquire assets that become money later.
In the real estate market, the end of the year months is not the most commercially active, because it is usually spent on gifts and holidays.
This is an opportunity for those who are looking for offers and promotions since it is easier to find land with financing plans for months without interest and lower down payments.
How do crises affect them?
Of course, and given the economic circumstances that the world is going through caused by the COVID 19 (Coronavirus) pandemic, you will wonder if it is safe to invest in times of crisis or wait for a better time to do so.
To answer this question, let’s take as a reference 2020, the year that was affected by the pandemic and paralyzed the world economy. Although many sectors were greatly affected, there were some that, although they did not grow, we’re able to maintain their stable levels.
One of them is the real estate sector, which remained afloat in Mexico, especially in regions such as the southeast, which has maintained constant growth in recent years.
An important factor that was beneficial for real estate in the country is that it was considered for the first openings in the economic reactivation after the first wave of the pandemic.
Many businessmen and entrepreneurs saw in the crisis an opportunity to acquire land and properties at a lower cost, which will allow them to obtain profits and considerable profitability.
There are many financial products in which to invest and that is safe even during crises, as daunting as the outlook may seem, sometimes waiting for better times is not the best option.
Types of investment according to the investor profile
In the case of being the head of the family, having one or more properties provides the certainty of having an estate, where the family can rest without worrying about having to pay a monthly rent; in addition to a possible source of extra income if it is a commercial premise or it is intended to be leased.
For entrepreneurs, investing in real estate provides the opportunity to build a network of properties that make up the assets of the company, and that in the future can serve as collateral for the business.
In addition, it also represents the opportunity to expand the business in these properties, and continue to increase their capital and income capacity.
For retired investors seeking diversification of accumulated capital, a property is considered a highly profitable financial guarantee, due to the various possibilities it has in the market.
In the opinion of analysts, businessmen, and real estate developers gathered in Mexico City during 2019 at the First Forbes Real Estate Forum, the opportunities that exist in the area of housing and infrastructure in Mexico are enormous.
“Mexico is experiencing changes, which has generated an environment of waiting, but not necessarily people have stopped buying,” said Carlos Ancyra, founder of Grupo Chartwell, in his participation in said forum.
In other words, what this expert said is that investing in times of uncertainty is safe if it is done in real estate.
At present, despite some factors that slowed it down during 2020, the real estate market in Mexico remains stable in demand from buyers.
Finally, no matter the time of year in which you decide to make the decision to acquire land – as we have mentioned – the elements that will really determine the success in a real estate investment have to do with the capital gain and the possibilities of use that are Give the property, location-related factors, and commercial or housing possibilities.
Real estate is always the best option
Now that you know the best times to invest in real estate, it only remains to find the right place to do it and the right company.
The Mexican southeast is a good starting point to invest in an exponentially growing market in the country. Yucatán and Quintana Roo offer options that fit what many new investors are looking for.
At BMF Inversions we are professionals in the real estate industry with extensive architectural and legal experience. We focus on highly profitable commercial investment lot projects with strategic locations.