We have all had experience with the notion that past performance is not indicative of future results, it is a common mindset among investors, however, it is still very likely that real estate will be a good investment even when the stock market and other investing options start to waver and as the economy starts to slow and head for a recession.
As the stock market values start to drop investors sell their shares and start investing in bonds to mitigate their losses, as more people invest in bonds the price of bonds go up. This increase in the price leads to lower interest payments, and historically when bonds yields (interest payments) are lowered so are mortgage rates
To successfully get through a recession as a real estate investor, you have to focus more on strategy. A properly planned investment strategy will allow any investor to be successful in all climates (www.aminvali.com).
A strategy to buy a home in order to sell for a lump sum profit is very different compared to a strategy to invest in a multifamily property for monthly rental income. A rental income strategy with careful consideration for location, demographics, quality and general potential can be profitable during a recession and has a high chance of outperforming the stock market and most other investing channels.
A recession can be a great time to invest in real estate, it opens up investing opportunities that otherwise wouldn’t exist. Taking proper supply and demand into account and managing risks and opportunities. During a recession supply tends to be high and demand for the same reasons is low, so you have the chance to buy at a lower price point, this allows you to gain rental income and eventually enjoy the perks of appreciation once the market is back up in the cycle (www.aminvali.com).
In conclusion, real estate is not a get rich quick plan by any measure, however, it gives you the best chance for stable income, long-term asset growth, risk mitigation, protection against inflation. Real estate also allows you to profit at a higher margin compared to other investments, especially during a recession when most other people are dealing with losses.
As a Realtor, Civil Engineer and MBA ,I understand and implement your needs in purchase, sale, build and sell or buy and hold of Residential & Commercial Properties.
Real estate is recognized as Essential Business because Real Estate is the backbone of our economy and it’s a money making tool for you.
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