The real estate industry is in good shape and pretty stable as compared to what it was five years ago. However, it doesn’t mean that this good status is going to remain there forever. Rough patch is also a part of the play and you need to deal with these inconsistencies. What matters the most is that how well you deal with these issues. Are you willing to wait for the bad time to pass or have you worked on some redundancy or surviving plans to stay as unaffected as possible during that bad time?
With that said, we are going to discuss a number of ways you can survive the brutal real estate crashes.
Properties that can be rented below the median
While it’s great to have a high-valued property for better rent, this property won’t be able to generate revenue during the bad days. Since you are not willing to bend the rules regarding rates of your property, you certainly need to do something in terms of readiness for the possible real estate crashes. The best way is to buy the properties that can be rented below median. A real estate crash is usually more associated with the affordability issue that tenants face. If you have a property that tenants can afford any time, you are surely going to get your business running even during worse of the days for industry.
Be a nice person
If you are a better person, you are surely going to be remembered for your services to the tenants. Your likeability for having better attitude, cooperation and an efficient approach towards solving tenants’ problems is your best feature that can convince prospective tenants to call you during the days of crisis. They’ll be expecting flexibility which is definitely the part of your personality.
Keep a serious check on cash flow
While purchasing a property, it would hurt you and also the people associated with the property later on if you are not dealing with the cash flow numbers with precision.
According to Jason Hanson who is a real estate investor, “You should sit down at the computer, open a spreadsheet, and factor in all your expenses. What is insurance going to cost? Is there an HOA fee on the house? Are you getting a home warranty? You want to know down to the penny what your cash flow will be on a property.”
You can also get some help from technology. Real Estate Virtual Tours is one of the programs that can help you with several real estate solutions including tough calculations and statistical analysis of complex scenarios.
Keep your mortgage status clear
While it’s easy and looks more profitable to use rent as an investment for the new real estate property, it can turn out to be a disastrous practice when market crashes and then you find it very difficult to pay the mortgage of the properties you own. In other words, it’s good to get rid of the liabilities in good days so that you will have less to worry about in the bad days.