Is it better to wait or start diving into RE investing? Will the market bust?

[LamboKing]

I'm wondering with interest rates the way they are now, what do you think will happen in the market? During Covid, I witnessed quite a few people buy cars and now have a monthly note of around $1000/month on a cheap Kia (when you factor gas, insurance, loan, maintenance, etc.), and I wonder will the auto market bust, and the housing market do the same. I feel like the banks over extended their loans because of the low interest rates, jacked up the price of the vehicle, and people now will over pay with a 96 car loan, so I can only imagine how people bought homes.

I'm new and ignorant when it comes to RE, so I just wanted to get an expert thoughts (I'm planning on trying to get into sfh or multi units of 4 or less).

 

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[Tau Ceti]

You are basically asking someone to predict the future. I don't think that is it's possible to tell you what will happen with certainty.

If you ask "experts" what their thoughts are, you are probably going to get many different answers.

And that is not even getting into the timing issue of the prediction. Remember this quote:

The market can remain irrational longer than you can remain solvent.

Say you get told with certainty that the US home market is about to crash in 6 months? What do you do?

Do you sell now and risk missing out potential capital gains until the crash comes? Do you sell in exactly 5 months but if you are right, then the market will be worse in 5 months and then it might be difficult to sell and if the sale falls through you may be stuck with an asset that is losing value.

Maybe you do nothing? Or maybe the person who told you this also told tens of thousand of people as well and now the prediction is not longer valid.

I think there is another quote from the movie the Big Short that said that being right early/late is the same as being wrong.

If you don't know then the best bet is always to try to maximize the upside while minimizing the downside. Be smart about it, if your tenants leave, can you pay the mortgage for your investment and your own mortgage/rent? What if the property is destroyed, flooded and so on?

 

[MakeItHappen]

You are basically asking someone to predict the future. I don't think that is it's possible to tell you what will happen with certainty.

THIS!

I didn't invest in the stock market for years because I waited for a crash that many "experts" predicted. I lost a lot of potential gains this way because the stock market continued to rise for many years to come.

If you can find a great property and can buy it for below market value it's probably not a bad idea to invest if the property has decent cashflow.

Trying to predict the future and buying based on predictions isn't investing but speculating imo.