Supply and Demand Contd..

The reason so many people have not succeeded in property investment is that they have not taken the time to understand the basics of the market. It does not really matter whether you are buying shares, stocks, commodities or property, if you do not understand how the market works, you will not succeed. If there are too many properties on the market in a particular area then invariably the price will drop. This is fine if you have the ability to keep the property and wait until the demand increases again.
Unfortunately, too many people in the past few years have bought at inflated prices and now find they cannot sustain the repayments and worse still because the supply of houses is great will not be able to sell without losing quite a lot of money.
The experienced investor will see this as an opportunity and will be readying himself/herself to get into the market at the right time. The secret is knowing when is the correct time to get in and buy at a discounted price. The critical time is called the Lag Time. In my next post I will deal with this concept and help you try and understand this very important phase in the cycle.