Its time for a little rant. I tried my best not to, really I did. When all the "oh so wise" I-told-you-so merchants first showed up last August I promised myself not to take the bait. Not to be antagonised by little people with little ideas who find it easier to drown out their own desperate inner voices than pluck up some courage, take control of their own financial future and step into the exciting world of investing. But I can't stand it any longer.

Everyone has become an expert throwing around terms like "sub-prime", "liquidity crises" and "credit crunch" like they have always understood their meaning and the intricacies that governs them. These are normally coupled with the words "chickens, home and roost". Oh, and of course: I told you so. And how good it must feel patting yourself on the back. I mean, it only took around 7 years (in which prices nearly doubled) of proclaiming the same thing over and over again until it finally happened. It reminds me of the old antidote: "How do you perform a successful rain-dance? Start dancing and don't stop until it rains!"

That all said we simply cannot ignore the fact that it certainly is a challenging time for some property investors. There is an obvious property slowdown as the shudders of the US sub-prime crisis and the weakening US economy keep spreading. Oil and food prices keep pushing up inflation and consumer confidence remains low despite the world's banks best efforts. Lenders keep a fierce guard on what little credit or cash they have available and many property owners who can not afford to remortgage are drowning in consumer debt. Distress is on the rise.

As investors we have little control over these factors. But we do however have a choice how we deal with these changing market dynamics. We can choose to merely react, or we can choose to respond. Many articles over the last few months have used Rothschild's famous quote, "Buy when there's blood in the streets." Few however chose to use the whole quote. It actually reads: "Buy when there's blood in the streets, even if the blood is your own."

As I write this I am half way through my visit to South Africa. Over the last week I have met with many astute investors and property professionals alike. I am fortunate to call many of these friends and I am always astounded at how much you can learn from an hour spent in the company of like minded individuals. Over the last year many have been building up their war chests and are now on the prowl for bargains. Some believe that the worst is yet to come, others that it's behind us. But all agree on one thing - the best time to buy property is NOW.

Many first time buyers have long been cheering a correction in the market at the expense of the big bad investors (dirty capitalist!). Only now that it's come they find that they can't afford nor obtain the level of lending they need. Everyone's dream "buyers market" has finally arrived but yet there are few who can make use of it. The irony in this is that once again it will be these astute investors who due to the misfortune or stupidity of others will become even wealthier than before by snapping up the best available deals. Once again the rich will get richer and the poor will get poorer.

I use to think that the later meant that people with money will make more money, but I have since developed a different understanding. What it actually means is that those with a poor attitude and mindset will continue to lose money while those with a rich attitude will continue to make money. Where some only sees dark times ahead and stand caught in the headlights like Bambi, others relish the opportunities to come and are ready to respond. Rich or poor, the choice is yours.

Many ask if we are in for another crash like in the late eighties and early nineties. In short the answer is no.
With all the doom and gloom it's sometimes easy to forget that the market is governed my fundamentals and not reporters. And these fundamentals remain strong in the UK. Interest rates are historically low; unemployment is at it lowest level for 20yrs and there is still a severe housing shortfall. Poor sentiment will interrupt but not stop the rise in prices. The price rise will continue once consumer confidence and liquidity return to the market and although the recovery will be at a slower pace it will be from a higher base than with previous market corrections.

How can this be? In my next article I will discuss the major elements that will lead to strong returns on your portfolio over the next 5yrs and why among others we should thank the UK's big developers and believe it or not - fat uncle OPEC.

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I look forward to speaking to you soon.

Mike Smuts
Property investor and Managing Director of Smuts & Taylor.