Real Estate Investments – Long Term Recession Proof Plans

Many people speculate that now is the worst time to invest in real estate. There are heightened fears of a recession, the global credit crunch means people are tightening their belts, and the cost of living has risen substantially.

Despite these concerns, however, real estate remains a solid investment. People will always need a place to live for a variety of reasons, including increasing immigration demands, divorce rates, people seeking greater independence at a younger age, students needing a place to live close to their place of study and the high cost of obtaining it. the staircase of the property. Therefore, this is a great opportunity to supply real estate to meet the needs of the rental market.

Investing in real estate during a recession is just as easy as investing during a period of economic growth. Property prices are much lower and there tends to be a number of cheap foreclosure properties on the market. This means there is a real opportunity to make money in real estate, but strategy during a downturn should be viewed as investing for the long term rather than relying on short-term investments.

“Flipping” which means buying a property, doing renovations and selling it quickly for a profit (usually within a 3-18 month period) was a very easy and profitable way to make money a couple of years ago, but it’s a strategy. which is full of holes in today’s market. Fewer people are buying property today and those who are buying are paying much less than the asking price and you could find that you are actually losing money instead of making a profit. Real estate investing requires a long-term view (around 2-5 years), because any property you invest in now while prices are cheaper will see a steady increase in value over time in the coming months and years.

So what are the factors you should consider when investing in long-term property?

Decide your strategy

If you want to attract young professionals, one or two-bedroom apartments are ideal in an area close to bars and clubs, and close to transport links for a quick commute to work. If your strategy is to provide homes for families, a 3-bedroom house with a garage space, close to schools, parks and supermarkets may be ideal. Deciding on your strategy in advance will make the investment process much easier.

Decide where to invest

Is the investment in a promising and highly desirable area? There must be accessible services nearby, such as shops, bars, schools and supermarkets. Look to see if there is an oversupply of newly built apartments or houses in the area that are vacant or taking a long time to sell or rent.

do your research

Learn to value property. What other properties are being sold and rented in the area you are interested in? Talk to real estate agents (but don’t trust them) to get the best possible understanding of the real estate market in the area. Do the investments you are considering add up? Research, research and research again and carry out your own due diligence to ensure you are investing in the right property, in the right area at the right time.

Rental Property and Equity

This is the key to investing in real estate for the long term. Rental properties can generate passive income almost immediately, although it’s probably only a small amount of profit each month. While you can’t expect to get rich off the profits from one property, five or more investment properties that bring in a small amount of profit each month will soon add up to a comfortable income. This benefit is useful when it comes to maintenance repairs for each property or to cover periods when a property may be empty. Real wealth comes from building long-term capital that you can free up over time to allow you to purchase additional investment properties.

Remember, this is a business.

You should treat your real estate investing like a business, which means you shouldn’t get attached to the property, which is quite common, especially among first-time real estate investors! It’s a mistake to get too personally involved in your property. You should not consider your own personal requirements, but those of the future inhabitants.

The real estate market is full of people driven by greed and fear. There were people who jumped in with both feet during real estate boom times because they wanted to get rich quick, but lost a great deal of money and their investments during the lean times because they hadn’t done the necessary research and due diligence needed to find out. succeed in any weather. Taking a long-term view in real estate investing will ensure success in periods of recession as well as periods of growth.