As news of a possible economic recession looms many instinctively shy away from real estate, but a recession doesn’t automatically end property investment opportunities. Commercial real estate is a strong option for many investors during economic recessions and Brevard County, Florida is a prime investment location. The Space Coast has experienced a boom in job growth in key areas over the past decade and there are many programs in place that make owning property possible. Here’s some integral information to help you decide whether you should invest in commercial property during a recession.
The Survival of the Real Estate Market
When you analyze real estate markets during economic recessions, you need to separate the commercial real estate market from the residential market. In fact, commercial real estate can actually thrive. Which investors can keep their investments afloat by managing risk and diversifying their investment portfolios.
As an investor and landlord, you can manage risk by doing a comprehensive background and financial review prior to leasing to establish if a tenant is creditworthy, by keeping in touch with tenants not only during good but also more difficult economic times, by being a great landlord who takes care of the property in a timely fashion and by keeping an adequate cash reserve. Our experience is that if the landlord is proactive and the tenants are taken care of then it tends to be a reciprocal relationship for all. In addition, if the market does turn downward the investor/landlord should know their legal rights, which should be defined appropriately in the lease, or in the mortgage should the investor/landlord have a mortgage on the property. If you adequately prepare for these emergencies, then you will be able to weather the storm better than others.
Real estate investors have also survived past recessions by diversifying their portfolios. Diversity comes in the form of investing in different types of investments like multifamily properties, industrial, retail or opportunistic. Diversification also means investing in properties from different regions in order to avoid the worst of the damage.
Commercial Real Estate Offers Stability
While recessions bring uncertainty, the real estate market can be a reliable source of income for investors. During a recession, some people aren’t able to afford their homes anymore so renting apartments in a multi-family complex becomes more appealing. Recessions also can create a buyer’s market if other investors are forced to sell their properties making this a prime time to buy up select quality properties.
Are you looking for a long term investment? Do you need to increase your passive income opportunities? Contact Ullian Realty in Brevard County, Florida. Our team of brokers is available to help you weigh your options and make the best decisions for your personal investment goals.