Do you know that homeowners suffered a total loss of $3 trillion during the housing crash of 2008? Zaki Ameer claims that with the ideal REI strategy, like purchasing real estate in the midst of a crisis, they have survived it. We’ve watched many podcasts and read many articles about the resilience of the real estate investing industry during downturns, but how does it surf through this storm? Let’s dive in and discover how to thrive in real estate even when the economy is struggling.
1. Prepare for Market Swings
When the economy starts to falter, it’s like a rollercoaster ride for real estate. According to Zaki Ameer, stress testing means trying to see which of your properties might struggle if circumstances become challenging. For example, what if tenants can’t pay rent on time or it takes a long time to find new ones? By testing these tough situations, you can figure out how long you can keep making money. This helps you know if you have enough money saved up for when things get rough.
2. Short-Term Goals for Uncertain Times
During a recession, it’s hard to plan for the future because things are uncertain. So, set small goals for yourself each week or month to stay on track. For example, maybe try to review your spending or renew one tenant’s lease each week. Achieving these little goals helps you stay focused and ready for when things start to look up.
3. Watch Your Spending
There are two kinds of expenses when you own real estate: ones that stay the same and ones that change. The ones that stay the same, like your mortgage or insurance, don’t change no matter what’s happening in the economy. But during a recession, you need to be careful about how you spend money on things like marketing or repairs. Every dollar you spend should either make you money or give you more time to help your tenants.
4. Invest in Technology
Moving your real estate business online during a recession is a smart move. Even if you’re not great with technology, there are easy-to-use tools available. For example, instead of meeting people in person, you can use video calls like Skype or Zoom. You can also use virtual tours to show properties online. There are even online tools to help you manage your properties and handle paperwork, like rental applications and leases.
5. Connect with Your Clients
Real estate is all about people. During tough times, it’s important to show your clients that you care about them, not just about making money. Be flexible with leases, communicate well, and be careful about raising rents too much. Keeping your clients happy helps keep your money flowing, even when things are tough.
6. Stick to Your Plan
When the economy gets rough, it’s easy to panic and make bad decisions. However, it is critical that you follow your long-term strategy. Real estate goes through ups and downs, but if you stay focused on your goals, you’ll come out ahead in the end.
7. Think Big Picture
Use tough times as a chance to think about your long-term goals as a real estate investor. Even when things seem really bad, there are usually opportunities if you look for them. Focus on growing your business, saving money, and improving your strategies for when things get better.
8. Market Yourself
Instead of cutting back on marketing during a recession, invest more in it. Building your brand and making sure people know about your business can attract more tenants and make you more money in the long run. There are lots of ways to market your business, like starting a blog or podcast, hosting local events, or making videos to show off your properties.
9. Stay Learning
It is crucial to continue learning even in times of hardship. Use your best learning time to stay informed about how the recession is affecting the real estate market. There are always new opportunities if you keep looking and stay informed about what’s happening in the market.
10. Be Ready to Act
Zaki Ameer points out that when the market is down, it can be a good time to invest in real estate. But you have to be ready to act quickly when the time is right. That means having cash ready to invest and building relationships with banks or other lenders so you can get financing when you need it. Being ready to invest when others aren’t can give you a big advantage when the market starts to recover.
Wrapping Up
In closing, for real estate investors during a recession, it’s all about staying hopeful and adaptable. By keeping an eye out and being open to change, new chances for growth and creativity can pop up. Looking forward, after the tough times ease up, there’s a bright horizon for real estate. Just keep your goals in sight, nurture your client relationships, and embrace tech tools. With these steps, you can tackle any hurdles and flourish in the shifting market. So, stay positive, stay connected, and stay ready to grab those opportunities.