Why Time in the Market is Better Than Timing the Market

[Mason Vitalis]

Often, I run into people who say something like "I'm waiting for the slow winter market" or "I'm waiting till the market crashes". While these are effective strategies and good ways to get deals when they happen, they aren't worth waiting for in my opinion. Especially for those trying to save up for a down payment, and waiting for the "perfect" conditions, this can be detrimental. 

In 2020 the average price per square foot for a duplex in the twin cities was $171. In 2024 that went up about 18% to $201 per square foot.

Can you save an extra 18% in four years for that downpayment? Maybe the answer is yes. Most of us would probably say no. This is why it's better to just get into the market when you can rather than waiting. In the Twin Cities market, we're typically seeing about 5% appreciation in the small multi-family space specifically year over year for the last 8 years. This means buying a duplex in 2020 would give you about a 25% ROI on appreciation alone by 2025. That doesn't even include cash flow and loan paydown. Not to mention the possible tax benefits you could be getting.

All that to say you can almost never out save the market. Especially with the inflation we've been seeing the last few years. It's better to get in as soon as possible to reap the rewards later. Just like Warren Buffet says, "time in the market beats timing the market". Granted he's mainly talking about stocks, but I think the same logic applies here.

Now this obviously doesn't mean you should just buy any deal. No deal is better than a bad deal, but there's great deals in every market. It's just a matter of finding them! 

For those of you out there who use this strategy, how is it going? Do you have any regrets or changes you would make looking back?