Diversification is essential as an investor, and real estate investing during recession is especially critical. It plays differently from other assets, so property investment is worth paying some special attention.
Just because the economy slows down doesn’t mean that investors should shy away. Instead, serious investors will find that properties are safe investments during recessions.
Busting a Property Investment Myth
Many believe that recessions indicate that property investment should be avoided because of the way the housing bubble burst before the last recession.
The truth is that during the several previous recessions the American economy has undergone, property revenue has remained stable or even increased during that time.
If you’re looking for the best time to invest in real estate, the time is during an economic crisis because falling asset prices create what is known as a buyers’ market.
The Best of Recession Investment Strategies in Real Estate
Finding the right property and smart investing go hand in hand during a recession or other economic downturn like what much of the country is experiencing right now.
What you want to look for during this time is either a fix-n-flip property or a buy and hold property. Both can be incredibly successful during a recession, all while adding diversification to your overall portfolio.
Companies like Relotz can make the process easier to determine if these properties fit the desired fix-n-flip qualities by way of providing information that results in significant investor revenue.
Stable Incomes and Volatility
Investing properly during a recession can produce income stability even though the rest of the country is experiencing economic volatility.
The reason for stable income is a predictable revenue stream, creating consistency for investors. Consistent revenue is why real estate provides for safe investments during recessions because rent payments are not tied to the stock market.
Even when the economy fluctuates, investors tend to be in a better position when it comes to hedging against inflation as well as coping with changing interest rates.
Property Outperforms More than Most Investments
Real estate investments didn’t react the same way as other investments during the last recession. While homeowners lost properties when the bubble burst, rental assets increased.
Understanding the way rental properties increased is significant because it allows investors to choose to either fix-n-flip or buy and hold with a good reassurance that there will still be something to bounce back from.
Because of the way real estate reacts during recessions or other economic crises like what we see happening in front of us, real estate will still likely be more profitable than stocks or bonds.
Selecting the Best Recession Investment Strategies
You need to consider your primary investment strategy. If your approach relies too heavily on appreciation, then you’re going to have more stumbling blocks. The same can be said for high-cash return expectations.
On the other hand, if you’re willing to invest in a property found in a good neighborhood that also has good jobs available, that’s the sweet spot. Atlanta is being sought after by investors more recently because it has become one of those areas that are full of sweet spot investment opportunities.
Choosing the Right Property
Investors that wish to purchase property in the right location can position the property in a few different ways depending on the current market. As a suggestion, properties can be used as rentals to start with, and then later sold for a profit when the market goes back up, and it always goes back up.
Relotz always gives you the information to be sure the property you want to invest in is going to be in that sweet spot. Our technology does the vetting to ensure positive cash flow and excellent returns for investors. Give us a call at 1.844.473.5689 to see what we can do for you and your investments!