Since the COVID-19 pandemic began and countries started to lockdown, economic experts have been predicting a global recession. We haven’t seen a pandemic like this in our lifetimes, so it is hard to predict what the fallout really will be. However, with travel restrictions all over the world and lots of people unable to work, significant changes are inevitably coming that will impact us all.
If you are in a strong financial position, you may be able to use this time to help strengthen your future. In a recession, we see a lot of homes coming onto the market and sellers want them gone quick. Unfortunately, many people need to access the money locked in their homes, or new investors suddenly find they don’t have the funds to support their portfolio. As a result, there are multiple opportunities to buy up property well below its actual market value.
You must know you have the funds to do this and to ensure your lifestyle doesn’t change when the recession really takes grip. So you should sit down with an independent financial advisor before making any decisions. This will help you see what money you have that could be invested in some property purchases.
You also need to consider what results you want out of purchasing. If you are thinking long term, buying up a few cheap properties and then renting them out and building healthy cash flow from that revenue, then you have to factor in all the expenses that could surround that. If you want to buy a home to flip it for a short term profit, then you need to be confident you are getting the best price available, and there is a market to sell too.
Using your own funds is an option; however, borrowing money during a recession can be cost-effective if the banks are forced to lower their lending rate. If you are looking at buying as a property wholesale, Visio Lending is one great resource. So do your research on what options there are out there for you to utilise as this could also increase your overall profit.
When the economy is in crisis, there is always the knowledge that at some point, it will start stabilising and then heading upwards again. History has proved that while a recession can be challenging for people who already have an extensive portfolio of properties, it is often the best time to start your own property portfolio. You will have much lower costs, much lower outgoings, and when the markets begin to rise, you will see a massive increase in value. As with all investments, it’s about buying when everyone is nervous, selling when everyone is confident. So if you have the financial strength and the ability to hold your nerve, you can make an excellent profit during hard times.
If you are thinking about investing in property, then now is definitely a time to talk to a financial advisor and find out what is out there!