Today we are posting a continuation of our previous posts regarding investing in real estate right now during a recession, and the main reasons why you should invest in real estate in general.
Another reason why investing in real estate can be smart during a recession is because property values are less sensitive to volatility. Buying a home or a multifamily property is a long term more stable investment for many reasons, one being that property prices don’t plummet when there’s a national disaster or when there’s an economic or political controversy, on the hand they don’t sky rocket in a short period of time either. That being said, buying property as an investment is an option for an investor who is risk averse and looking for long term wealth and asset generation.
Even the most successful investors will experience setbacks during a recession especially when the stock market is unstable. Most investment options are closely correlated to the stock market, real estate on the other hand has a lower correlation to the stock market. Investors can rely on the steady stream of rental income during a recession when their other non-real estate related investment options are performing poorly. During a recession people still need a home or apartment to live in and business owners still need to pay the rent due on their lease.
Even if property values drop during a recession, a real estate investor continues to generate income from rental properties. Of course, the 2008 recession was an exception to all of this, simply because the recession was caused by a housing bubble. So success as an investor has a lot to do with planning ahead, research, and the right strategy (www.aminvali.com).
Historically, during a recession, homeowners and commercial (business) property owners experienced more volatility compared to multifamily property owners. Investing in a multifamily/multiunit property is doable for a first time or veteran investor (www.aminvali.com).