Today we are going to continue our previous post regarding investing in real estate now during a recession (the one we were expecting this year which has been made worse by COVID-19) and the biggest reasons why you should invest in real estate in general.
One of the reasons why you should invest in real estate is, particularly rental properties and multifamily properties is earning stable monthly income. Another way to generate monthly income from real estate investments is by investing in a real estate investment trusts (REITs) which can provide you with income from dividends paid out on your investments. An experienced real estate agent can explain the pros and cons of all of these avenues (www.aminvali.com).
Whether you decide to invest in a property by yourself, with partners or even with an REIT, you can expect more predictable results and fewer surprises compared to other investment avenues such as the stock market, especially during a recession. So, you can more comfortably rely on the monthly income from real estate investing.
Depending on the location of your investments and the industries that are the biggest employers in that particular area, you could stand to see little to no fluctuation in the rent payments of your tenants. This is because recession or not tenants know that rent is due every month and the state of the economy or the stock market has no effect on that.
Earning monthly rental income allows you to have a barrier against the general negative effects of a recession as well as inflation. If there is inflation and prices and the cost of living go up, when it’s time to renew a lease you have the ability to raise the rent at the same rate as inflation (or more depending on the rental market) in order to offset your increased costs of property management and cost of living. Your realtor can explain exactly how lease renewals and price increases can be handled (www.aminvali.com).
In conclusion you have less risk and more control and stability with real estate investing compared to the stock market or other similar investment avenues.
Our next post will be a continuation of the reasons why to invest in real estate now.