Rob Lankey is managing director of Aldermore commercial mortgages
Let's be honest, we've all had moments when we've dithered over a decision.
Anybody who's bought a camera, TV or computer has inevitably asked themselves if they should buy now, or wait a few weeks until the latest model comes out and/or the price drops. I took the plunge last year and splashed out on an all-singing-all-dancing TV to complement my home cinema system and, lo and behold, everyone is now talking about 3D TV!
The problem is you can end up playing an eternal waiting game. If you need a new camera or computer the best strategy is to go and buy one today; if the product meets your needs, then go for it.
A similar conundrum faces property investors. Should they take advantage of the cut-price deals currently passing across their desks, or should they wait and see if property prices fall still further or if yields move positively?
Trying to second guess the housing market and ultimately the economy is, in my opinion, a mug's game. And unfortunately economic data makes the challenge no easier. In the final quarter of 2010 the economy contracted by 0.5%, fuelling speculation that we could be heading for a double-dip recession. However, the very latest data shows that during the first quarter of 2011 the economy grew by 0.5%. So, do you interpret that as meaning the economy has now turned the corner, or is it simply bumbling along the bottom?
The truth is no-one, not even the so-called experts, knows for sure. All you can do is base business decisions on the facts that are currently available to you. If an investment opportunity looks good, stacks up financially and fits in with your business objectives, then it's probably a deal worth doing. Sure, you may be able to close the deal at a better price in a few months time...but you may not.
I get a strong sense that a number of property investors are playing the waiting game at the moment. Wait and see is a very tempting strategy; after all doing nothing is a reasonably safe option.
But it's not a very profitable one. Procrastinating doesn't pay the bills and it makes little sense to sit and do nothing if profitable deals are available to be done. The good news for property investors is that finance is available to support sensible cases and lenders like Aldermore are willing to find ways to make deals happen. Cases can be turned around quickly and with base rates remaining low, funding is affordable. What's more demand for good quality rented accommodation is strong, with little sign of that demand abating.
If you're concerned that you may jump too soon, just bear in mind that you may also end-up missing the boat. Judging your timing so that it's spot-on is an almost impossible game to play; as long as the deal stacks up, then it's probably worth considering.
We can't all sit on our hands forever.
