Due to the massive and historic economic expansion of the last decade, many of us knew that a recession was coming, some of us predicted it would happen in 2020, however, no one was expecting a COVID-19 pandemic to accelerate the process. Either way it is here, and we all have to deal with it. We now want to pose an important question. What does a recession exactly mean for those who are investing in multi-family real estate?
The news is not as bleak as you may think. Many industries that have seen a growth over the past few years are not necessary impacted by the pandemic and will likely not see much of a downturn during this recession. Healthcare, insurance (main-line, property and casualty and life), industrial and tech are barely impacted and, in some cases, thriving in this climate. It’s mostly welcome news for income property investors. Income from these industries (in the right region) will lead to rental property income. You can discuss these factors with a real estate agent (www.aminvali.com) and come up with an investing strategy geared towards locations that are hotbeds for these industries.
The cost to finance will likely drop, and an investor can ride the wave with low vacancies and as the economy slowly moves back to equilibrium there will be a slow but steady increase in lease rates.
You should, however, keep in mind that no matter when you and where you invest, if the property is not properly managed, it will not thrive in any economic climate. A professional realtor (www.aminvali.com) with multifamily investment experience can give you the information and resources you need to property manage a rental property. A successful investor remains profitable in any economic climate, our next post will give you some tips and trick regarding this topic.
Have a great week!