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It’s no secret that the housing market has been shaken up a bit over the last few years, and most especially after the COVID-19 pandemic first began. Home prices have skyrocketed, inventory has been a challenge, and interest rates, while historically low for the better part of the pandemic, have shot back up again in recent months. If you’re a real estate investor, the fluctuations may feel like an insurmountable hurdle, or at the very least, a significant challenge. Whether you’re a new investor or an experienced one, having a game plan in place to prepare for market shifts is a smart move, and there are strategies that can be used to not only keep up with a tough market, but also be ahead of the crowd.
Keep your operations small and nimble
This is particularly critical if you’re a full-time investor with your own company. Keeping it small enough (without sacrificing the quality of work and without missing goals and investment opportunities) to quickly adjust to a shifting market can be the difference between going under and surviving, and perhaps even thriving. Look at any opportunities to hire consultants and allowing them to take on more tasks. This can include people like your real estate agent, contractors, or wholesalers who all tend to have great industry insights.
Plan for the inevitable…and use it to your advantage
Even if it may feel daunting at first, market shifts can open new investment opportunities that can allow you to outthink your competitors. Low inventory? Explore ground-up construction options and learn local zoning laws. Properties becoming too expensive? Consider investing in a multi-family property and living in a unit to save on costs. If you’re keen on expanding your portfolio outside of your area, look into ideal vacation rental markets and see where you can go next.
Keep a pulse on the data
You can’t get ahead in the industry if you don’t know the numbers. Tracking things like asset-level, market-level, and trade-level data can give you important intel to make key decisions on any investment project. Consider things like how many days properties are averaging on the market and neighborhood trends to make sure your property remains competitive.
Cash is still king
Having connections to reputable and reliable hard money lenders—or private money lenders—can be a huge asset when the market fluctuates. Bargains tend to become more available in market declines or slowdowns, and having access to a good lender can help you capitalize—no pun intended!—on an investment opportunity.
At the end of the day, strategy and the wherewithal to think ahead and act are key to succeeding in real estate investment, no matter how the market ebbs and flows. There’s great flexibility in being an investor where you can dictate what choices to make and when. If you’re interested in connecting with a private lender to discuss investment opportunities, contact us today.