How to steer your real estate investments through a recession
-
Loading... - Deborah Baah
- 31 Aug 2022
- 65 Views
- 0 Like
- 0 Comment
Worried about a housing market correction wreaking havoc on your real estate investments?
Between high inflation, rising interest rates, recession fears, and a stumbling stock market, investors have plenty to worry about in 2022. We’re already seeing a housing correction in some markets, and pundits raising housing bubble concerns.
Where does that leave you as a real estate investor?
Consider these strategies for investing in real estate during housing downturns, without worrying about trying to catch a falling knife.
Residential income properties
While home prices sometimes dip during recessions, rents rarely do. At worst, they level off for a year or two, like they did during the Great Recession. The consensus among economists is that rents will continue rising throughout 2022.
So, your rental cash flow calculations won’t change, even during a recession or housing correction. Even if your investment property dips in value, your rental income won’t drop, so you can continue holding and earning cash flow while you sit out the storm. It’s precisely why investors recession-proof their portfolios with rental properties.
Meanwhile, investors get more opportunities to score bargain deals during downturns. Foreclosure activity is on the rise, providing plenty of motivation for homeowners to sell their house in foreclosure quickly.
Housing market corrections also lead to more homeowners upside-down on their mortgage. Again, that creates opportunities for savvy investors who know how to work with banks on short sales.
In short, housing downturns offer plenty upside for long-term buy-and-hold investors. Read More...
