3 Surprising Reasons Why Investing in Real Estate Is a Smart Move During a Recession

Investing in Real Estate Is a Smart Move During a Recession

Economic instability seems to be the only thing that is permanent in the market which can instill fear among real estate investors around the globe. However, the fluctuating economic climate and the figures that are the main focus do not necessarily have to be a cause for concern when it comes to real estate investing. In fact, many real estate investors have managed to find the “light at the end of the tunnel” and make significant profits, even during a recession.

Here are 3 reasons why a Real Estate Investment would be a smart move.

Reason 1: Real Estate Continues to Appreciate in Value

Over the last 70 years, despite several recessions, real estate values have continued to go up. In fact, there have been instances where the values have increased even during a recession itself. But even if economic turmoil causes a hot housing market to cool down, that’s still great news for investors since this could potentially create opportunities to purchase properties at discounted rates.

Reason 2: Vacation Rentals Perform Well During a Recession

Historically, short-term rentals in domestic leisure destinations perform well during a recession. Amy Hinote, founder, and editor-in-chief of VRMIntel Magazine says short-term rentals have in fact seen notable growth during economic downturns. Domestic travel was at an all-time high in 2022. The Outer Banks of North Carolina saw a record year for Vacation Rentals. Having a passive income source can help stabilize overall income while creating significant tax advantages.

Reason 3: Real Estate Is More Stable Compared to Other Investments

Compared to other investments such as stocks, Government bonds, Certificates of Deposit, Mutual Funds, etc., real estate is more stable overall. According to business and capital news giant Bloomberg, stocks are unstable in nature and can easily be affected by economic crises. On the other hand, a recession has minimal effects on real estate. And since real estate is a physical, tangible investment, you can put it to use even if its value decreases.

In closing, the current market provides opportunities for smart buyers and sellers. Investing in real estate has been proven to be the safest way to secure your money during a downturn in the economy. For buyers, the growing inventory and the rates edging back toward 5% provide plenty of opportunity to seize a money-making real estate investment. Currently, we are seeing more of an even playing field between buyers and sellers on the Outer Banks. The prices have stabilized and there are more opportunities for a sound investment. Sellers also have an opportunity to sell their homes at a strong price and upgrade their investments. By reinvesting in a better home these sellers can really take advantage of the current market conditions.  Either way, the Outer Banks Blue real estate agents are ready to service your needs. We continue to be a top-ten real estate sales team with effective agents. Our brokers are here to help with any questions that you may have about buying or selling or just the market news.

Give me a call anytime. I am always happy to help.
Ken Baittinger 252-305-5255, ken@outerbanksblue.com
Ken Baittinger | Outer Banks Blue Real Estate Broker

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