How to Prepare for a Recession as a Real Estate Investor
Posted by Techyscouts | Posted on 09/15/2020
The coronavirus pandemic and its associated social distancing guidelines have imploded demand and caused the stock market to crater, and chances are, we’re heading into a recession – or worse. So what does that mean for real estate investors? At the offices of Mike Millea, we’ve helped our clients navigate the complexities of the Los Angeles real estate market for years, facilitating complex transactions for all manner of investment properties. So with that in mind, here are a few tips on how to prepare for a coming recession as a real estate investor.
What Real Estate Investors Should Do During the Recession
Surviving a recession is difficult for anyone, but in a market as volatile as real estate, it can be particularly hard. As property values sink with the GDP, the ample opportunities of the boom times seem to disappear. So what’s a real estate investor to do?
Ultimately, how you act during a recession depends on your position and your financial goals. But my advice is simple: be a cash investor.
A recession means there will be many more distressed and motivated sellers on the market, and properties will be available for deep discounts. The recession will also make property look like a bad investment, scare off most cash investors and drastically reducing the competition. But the cash investors who stay and weather the storm will be able to dramatically grow their portfolio and financial position, even in the midst of an economic downturn.
While the stock market has lost a gargantuan portion of its value since the COVID-19 crisis began, the markets are still incredibly volatile and there’s a great deal of uncertainty in the future. The full effects on the real estate market are still unclear, but chances are things will get worse before they get better. That makes this the perfect time to increase your liquidity so you can take advantage of discounted properties when the recession fully hits.
Contact Your Los Angeles Real Estate Agent
Of course, to get the best deals on investment properties in a market as complex as Los Angeles real estate, you need a real estate agent with experience – and that’s where we can help. Mike Millea has been helping real estate investors find the perfect properties and negotiate great deals for decades, and we’d be happy to do the same for you. Contact us today to start discussing your real estate goals and how we can help you realize them. We can’t wait to hear from you, and regardless of where you are in real estate, we hope you’re staying safe during these difficult times.