The real estate industry is experiencing some turmoil due to recent events. The market is volatile but manageable, and it wasn’t as bad as the real estate crisis back in 2008. However, you still need to prepare your finances if you want to survive this year’s real estate industry, especially if you’re an investor or a businessman. The first thing you need to do is assess your assets and see what you sell in the future.
Every investor should assess their asset at the start of the year. We’re getting well into the middle of the year, so if you haven’t done this yet, you’re lagging.
Essentially, assessing your assets can tell you how much risk you can take. Of course, your risk can also be determined by the investments you have to make. Your cash is regarded as a low-risk asset, while higher-risk assets such as stocks are listed on the top.
As an investor, mastery over the value of your assets is crucial to controlling your finances. This is why investors do their assessments every year. For those that have hundreds of assets, they do it quarterly. Once you’ve assessed your assets, then you can start choosing which investment option you can take.
Hold Unto Other Investments
Don’t sell your stocks or other assets just yet, if you’ve noticed the downward trend of the real estate industry. Control over your fears can help you control your finances. Right as of the moment, the main reason the real estate industry is falling apart is due to the housing shortage and expensive homes. But later, you’ll realize that there is a way to bypass this. Right now, hold onto your other investments.
If you want to take a bit of risk right now when it comes to stocks, then REITs are one of your best options. REITs are a constant variable for almost every real estate entity. Essentially, many in the industry utilize these stocks to manage their properties. Huge conglomerates will always need your money, and in return, they’ll give you a percentage of your share. Regardless of the state of the market, REITs will always remain valuable.
Refinance Your Mortgage
Are you ready to make some advancements in your investments? One low-risk move is to utilize your refinanced home loan to make the riskier investments into real estate today.
A refinanced loan is one that has lower interest rates and longer payment periods. This means that you take less risk by utilizing this kind of loan. Moreover, it also helps if your investments aren’t doing so well. Having access to refinancing can help you survive the current state of the market, and with rates so low, you’ll never worry about payments ever again. Expect to have a refinance rate of around 2% to 3%, one of the lowest rates that the country has ever experienced.
Get Other Loans If Possible
If it’s possible, you should get other low-rate loans you can. Taking advantage of these loans can help you leverage the market and make it your plaything. Business loans from the Small Business Administration (SBA) can certainly help because they have historically low rates. However, you can only borrow up to $100,000, not enough to invest in a new property. But if you’re smart enough, you can make that $100,000 huge with the current state of the real estate industry today. You can do it by investing in old properties.
Don’t Invest in New Properties; Invest in Old Ones
The main strategy that many people are doing right now is house flipping, and this does not only apply to investors.
House flipping used to be a side-hustle for some real estate agents. Buy old homes, flip them using new decor and renovate some parts, and resell them at a higher price. This was a low-risk investment for them and a worthwhile job to do on the side. But this year, flipping homes is the new trend.
You can purchase old properties for as low as $100,000 (maybe even lower than that) and flip them using around $50,000 of your cash, so if you can have two properties ready to sell in the market for the price of one new property. The best part is that you can sell each property for at least $200,000 and $250,000. Considering that median home prices are around $300,000 to $400,000, your flipped properties have competitive prices.
By following these options, you not only survive the current state of the real estate industry today. You can also grow your empire and gain more assets along the way.