Insights for Investing During a Rocky Economy

The current pandemic has caused many things to shift and change, some overnight. With these changes comes the need for a new way of doing things to stay in business and prepare for the future. Here are some tips on how commercial real estate investors can get through this rocky time.

Have Patience

The future is very unpredictable, especially with no solid decision or plans of when businesses will be allowed to go back to full force. The market might not bottom out for some time and it is best to make solid and well educated and thought out moves. If the investment you are thinking of changing doesn’t provide any solid information or predictions, it is best to hang tight and wait for a bit.

Look For Opportunity

During this time some investors may be looking to sell off some properties at lower prices to help ensure their financial stability. If you are able to purchase, times like this create an opportunity to invest for less, pad your portfolio, and build wealth.

Be Prepared

If you own income-producing properties it is smart to have reserves built up for times when tenants might not be able to pay rent. If you don’t have these reserves hopefully you can lean on some built-up equity. Now is always a great time to build up reserves if you can, because really it should always be something that is done. The optimal time to set aside money for emergencies is when you started out.

Be a Lifelong Learner

The people at the top of their game, are the ones constantly learning and shifting to make things better. In times that are rocky, it is especially important to learn from circumstances you are in, as well as circumstances of those in the same field around you. Don’t think that you have a complete understanding of all things. Be willing to learn from mistakes and adjust should similar circumstances arise in the future.

For example It is not unlikely for an investor to think in times of financial crisis that “affordable” housing is going to be a stable investment. Even if a recession comes, the homes that offer lower rents will continue to have occupancy demand.

The average renter in these types of homes are “blue-collar” workers. This is the class that is likely to be most affected by the current economic circumstances. Recent studies have revealed the average American does not have a large emergency fund and the lower the income the less likely to have a fund at all. When renters are out of work for two, three, or more months then property owners may have a sticky situation on their hands as rent is unable to be paid. With kids currently home it becomes difficult for some renters to look for new work outside the home to continue to make ends meet. Whereas the “white collar” workforce has been able to move a good amount of their work online and continue to work from home. Making rentals in this market a bit more of a stable investment during hard times.

Optimism is Needed Everywhere Even in Commercial Real Estate

Times are tough and stressful, but it is important now more than ever to keep a sense of optimism. It can be hard not to give all of your attention to things that seem urgent and negative. Only giving attention to these things can be detrimental to your overall well-being. This time will pass and there may be a recovery period, but you will recover and may even come out stronger and wiser than before. So don’t forget to take some time to think about what is positive right now, it will help to get you through.

For more information on commercial real estate or potential Minot commercial real estate opportunities during this time, please contact us anytime.

Comments:

St. Petersburg Commercial Real Estate Broker says

Now is a weird time for people but these are great tips for staying in the game. 

Snohomish County Commercial Broker says