Like everyone else, you’re probably asking yourself “what should I do now that inflation is so high?” Back in 2008 the vibe was very much the same with uncertainty reigning king. Not knowing what to expect or how we could leverage a market that was tanking was on the forefront of everyone’s thoughts.
In 2008, I was handling short sales with a broker and saw first-hand that this was nothing to be fearful of, and how much of an amazing opportunity the market was giving us. Did we lose some equity in our properties, yes, BUT we were able to have our rent roll increase as we held on tight to these properties while they regained their value. We leveraged the market, buying at a discount and adding to our portfolio.
Here’s what I learned and how it applies to this current market:
- Diversification. The oldest principal to investing smart. Take a look at your financial environment and risk, and make sure you can pivot as needed
- Becoming more liquid in a down market to buy properties at a deeper discount (leveraging the market)
- Have some reserves for tenant vacancy
- Live within your means, personally. No keeping up with the Jones!
- Cutting the fat in your businesses to prepare for client hesitation during the buying or selling process
Overall, the bottom line here is there is no need to fear! We have been through a tougher market which taught us what we need to do to pivot properly. Now, deploy those actions and continue to buy properties within your own financial environment and risk tolerance. We should be excited and prepare to take advantage of this current real estate market. I know I am!