Investments markets will not always be stable. There will be some period of uncertainty and sudden changes in the investment markets. Uncertain times can result from numerous things such as pandemics, wars, terrorist attacks, disasters, sanctions, economic recessions, etc. During this time, a lot of people find it difficult to invest with confidence.
Uncertainties can cause panic, and as a result, some investors make terrible financial decisions. For this reason, Upkeep Media Inc. is sharing some principles that can guide you to invest in uncertain times.
1. Be prepared for uncertainty
Planning and preparing for uncertainties is the best thing you can do as an investor. It would be best to build up equity and cash reserves to cushion your investments during uncertain times. If your property is providing you with a steady income, we advise that you save money from it every month such that it can take care of your expenses for at least six months.
If you intend to acquire properties during uncertain times, you have to start now to save money for it while waiting for the opportunity. The optimal time to prepare for such an investment is about two years.
2. Have patience
During uncertain times, there is a lot of impatience and fear among investors. The result of this is poor decision making. It would be best if you practice patience and remain calm in the face of uncertainty. You cannot predict the future, so it is needless to panic. If you have patience with your investments, you will not make terrible financial mistakes.
3. Be optimistic
Aside from patience, optimism is another virtue you should cultivate as an investor. Do not focus too much on your losses. Doing so will prevent you from seeing newer opportunities and also missing them. Instead, it would help if you were optimistic about bouncing back when the uncertain times end.
4. Be on the lookout for new opportunities
No matter how uncertain the times are, they will always be new opportunities. Even the uncertain times can create newer opportunities. You can recall how several investors felt terrible that they did not buy more properties during the 2008 housing market crash. That period was an opportunity to invest.
5. Do not stop learning
Always learn from uncertain times. There are still many new things to learn whether you have many years of experience or are a newbie. Things can change just when you think that everything is under control.
In the most uncertain times, you should approach the changing situations, mistakes, and new circumstances as an opportunity to learn. If you do this, you will not panic during uncertain times.
6. Diversify your portfolio
The best time to diversify is during uncertain times and when the economy is poor. If you have only one investment and it fails, you lose everything. But if you hold numerous assets in your portfolio, there is a very slim chance that all of them will fail. Diversification helps to reduce the level of risk you incur during uncertain times.
7. Think outside the box
To have a successful investment during uncertain times, you need to think outside the box and be creative. For instance, during the total lockdown due to the COVID-19 pandemic, homebuyers could not physically visit or see properties. Innovative agents and sellers had to give clients a tour of the property using Zoom, FaceTime, Skype, etc.
Creative sellers were still able to make their sales and continue with business while maintaining social distancing. There are several aspects of real estate investments where you can apply your creativity to stay in business even in uncertain times.
8. Take advantage of the situation
During uncertain times, you should be greedy when others are afraid. That is the best way to grab beneficial opportunities that others are afraid of investing in. However, this does not mean that you should be carefree with your investments. Instead, it implies that you should focus on the opportunities that exist when others are afraid of trying.
9. Be practical with your investments
Expect delays in your investments in uncertain times. You should be practical and extend contracts where necessary during this time. It would also help if you accounted for the additional costs that may come up as a result of the delays and uncertainties. As the name implies, things are uncertain during this period, so you should create room for unexpected events and get ready to cushion them.
10. Choose a fixed income over a variable income
When things are uncertain, your income should not also be uncertain. A fixed income is more beneficial during uncertain times because it will help you plan for the future. You must know the income you are expecting to plan or save for the future. If you are to choose between a fixed and a variable income, go for a fixed income.
You should always expect uncertain times in the future. Your ability to plan for it and invest appropriately will help you thrive during and after uncertain times. Contact us today to learn more information on how to become a successful real estate investor and landlord.
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