Regardless of the type, investors’ first and foremost concern is whether or not now is the right time to buy. Surprisingly, the answer to this question differs depending on the investment at hand. The ideal time to buy income property may not be the right time to acquire other types of investments and vice versa.

Because income property relies heavily on changes in the economy, the time of the investment is not as relevant as the means of acquisition. As the government deals with the current recession by continually spending in excess of revenues, the difference between how to buy and when to buy is even more apparent.

There is both support of and opposition to this method, but the fact remains that to allow this spending, new bills have been printed; therefore, there is too much money in existence.

Using historical statistics, the current climate can be dissected to some extent. Net Gain describes a recession as a manner of alleviating surplus. There have been 20 prior recessions since the start of the 20th century, all of which have made a full recovery. Statistics show that the length of time between peaks of a recession determines the level of excess, which indicates the severity of the next recession.

In assessing the past 20 recessions, the average number of months between peaks is 59 with the most recent lasting 81 months. The average length of time between peak and bottom is 14 months. Based on this information and fact that the current recession is in its 20th month, investing in income property at this time would be a wise decision.

With the understanding that the time is right, it is now critical to discuss how to invest given the specific aspects of income property and the current economic climate. Key mistakes made during recession peaks will cause property owners significant financial hardships. Those suffering in the current conditions most likely set unwise terms, borrowed too much money, demonstrated poor follow-through, and set the stage for higher expenditures than revenues.

As NetGain has addressed in previous articles, these issues are not to be taken lightly and should be strongly considered and addressed before making the decision to invest. Right now terms of mortgage are a critical point of focus due to the influx of currency. With increased interest rates, inflated prices, and strategic terms, investors can ultimately use money of decreased value to repay the mortgage.

Honing in on a few important aspects can create a mortgage that will work well in this environment. First of all, interest rates should be fixed, the loan should be for no longer than 20 years, and there should be no due date. Other important conditions include amortization, non-recourse, and acceptable assumptions. Finally, lock-ins should be less than a year and early payment penalties should be less than 1.5%.

The economic market of today offers many possibilities, but only if the investment is set up correctly. Failing to consider the elements that make up a worthy contract can negate the benefits brought on by ideal timing.