One word has the power to make most investors cringe, “recession.”
As sickening as the word may make you feel, you shouldn’t let it scare you away from investing in your financial future. Times of economic uncertainty are an excellent opportunity to invest when you do so wisely.
This article looks at three significant reasons investing in multi-family real estate is still a brilliant thing to do when the economy is on shaky legs and why this is a great time to grow your money mindset and continue investing in your future.
Why You Should Still Invest in a Bear Market
Just as life continues in times of uncertainty, so should our planning for the future.
Investing during times like these may feel counterintuitive. However, it is crucial to continue investing wisely and keep your sights set long-term. If the thought of investing in the current economic environment still makes you nervous, here are a few tips to keep in mind.
- Have a nest egg – While you want to invest a healthy amount of money and maximize your ROI, keeping enough of a nest egg set aside to cover 4-6 months of your expenses should you find yourself in a bind will help you sleep better at night.
- Diversify your portfolio – Even though having a nest egg is a good idea, you don’t want to put all your remaining eggs in the same basket. Spread your investments across several areas to help ease the burden when one area isn’t doing too hot.
- Don’t sell in a panic – You don’t want to dump your investments in a panic. Historically, the pendulum always swings back in the other direction. You can weather the storm if you have a good nest egg and your portfolio is diverse. Remember, you are in it for the long haul.
3 Reasons Why Multi-Family Investing is a Smart Financial Decision
- Rentals are in high demand – Especially during times of rising interest rates and inflation. People want the amenities and affordability of a multifamily housing complex when the prospect of home ownership seems out of reach. Multifamily housing projects offer all of the amenities renters are looking for and allow renters to save money without having to pay steep mortgage rates.
- There are some significant tax incentives – In a recent article we discussed several tax incentives for multifamily rental properties. If you invest in multifamily real estate opportunities, these incentives can save a decent amount of money in the long run, but you must know how they work.
- Multi-family investing has a good track record – As we saw with past recessions, the rental market remains consistent through recessions because there is always a need for rentals in uncertain economic situations. Because the demand is always there, there will always be a need for it regardless of how the market is doing.
How to Develop Your Money Mindset in Uncertain Times
While no one can say precisely what will happen over the next few months, looking to the past and understanding how others developed the resilience to carry them through hard times is essential. Developing a successful money mindset is as necessary during a recession as in times of prosperity. Regardless of the economy, a money mindset will help you attract more financial success and give you the strength to withstand struggles.
Practice the following things to develop a stronger money mindset:
- Show gratitude for what you have
- Be generous towards the things that matter to you
- Prioritize your values
- Learn from mistakes and accept personal responsibility
- Believe in your ability to reach your financial goals
Key Take Aways
- You should absolutely continue to invest during a potential recession.
- Remember your long-term goals, and don’t let short-term uncertainty deter you.
- Multi-family investments have done well in past recessions.
- Educate yourself and make informed financial decisions.
- Continue to develop your financial mindset and know that your financial goals are achievable.
Would you like to learn more about being a passive investor in a multi-family real estate syndication?
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