{"id":179006,"date":"2024-11-15T13:42:59","date_gmt":"2024-11-15T20:42:59","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=179006"},"modified":"2024-11-15T13:43:29","modified_gmt":"2024-11-15T20:43:29","slug":"how-investors-can-keep-moving-when-the-market-is-stuck","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-investors-can-keep-moving-when-the-market-is-stuck","title":{"rendered":"The Housing Market Might Be &#8220;Stuck&#8221;\u2014But You Can&#8217;t Afford to Wait"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">There\u2019s a new word to describe the U.S. real estate market: stuck. Real estate transactions haven\u2019t picked up as expected, even after conscious cuts to interest rates. Even <\/span><em><span data-preserver-spaces=\"true\">the Wall Street Journal<\/span><\/em><span data-preserver-spaces=\"true\"> declares that the real estate turnaround \u201c<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/economy\/housing\/us-housing-market-stuck-2024-4830d4f7\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ended before it started<\/span><\/a><span data-preserver-spaces=\"true\">.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Most buyers and sellers alike wait for ideal conditions before <\/span><span data-preserver-spaces=\"true\">moving into<\/span><span data-preserver-spaces=\"true\"> the real estate market. And while we don\u2019t blame anyone for this approach, we also need to clarify <\/span><span data-preserver-spaces=\"true\">this:<\/span><span data-preserver-spaces=\"true\"> Investors can\u2019t afford to wait.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We can\u2019t <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/blog.reination.com\/stop-waiting-for-mortgage-rates-to-drop.-now-is-the-time-to-invest\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">sit by and twiddle our thumbs<\/span><\/a><span data-preserver-spaces=\"true\">, even if we\u2019re not actively buying or selling properties! Estimates say it could be 2026\u2014or even later\u2014before the market finds its footing again. You can\u2019t wait that long. In real estate investing, time is of the essence.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\"> Often, investors are waiting for the right time. They are trying to \u201ctime the market.\u201d Any rental investor worth their salt will tell you that \u201ctime in the market\u201d is the most <\/span><span data-preserver-spaces=\"true\">important<\/span><span data-preserver-spaces=\"true\"> factor. You can\u2019t afford to miss out on passive income or appreciation potential.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Five Things Investors Can Do When the Market Isn\u2019t Moving<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, what\u2019s an investor to do to keep moving in a \u201cstuck\u201d real estate market? Here are five action items.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">1. Evaluate your portfolio<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">The first step is to look at what you already have. Whether active or passive, investors must attentively evaluate their assets to ensure they\u2019re efficient, profitable, and aligned with their long-term investment goals. These particular metrics <\/span><span data-preserver-spaces=\"true\">are not going to<\/span><span data-preserver-spaces=\"true\"> increase your return or income, but being aware is the first step to making informed and intentional decisions.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here are a few metrics and indicators passive investors value and why they are <\/span><span data-preserver-spaces=\"true\">important<\/span><span data-preserver-spaces=\"true\"> for evaluation:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Net Operating Income (NOI): <\/span><\/strong><span data-preserver-spaces=\"true\">Income generated from the properties after operating expenses (excluding mortgage payments). Are there areas <\/span><span data-preserver-spaces=\"true\">we<\/span><span data-preserver-spaces=\"true\"> can improve NOI? Increase income by offering low-cost services? Can we lower <\/span><span data-preserver-spaces=\"true\">expenses<\/span><span data-preserver-spaces=\"true\"> or add low-cost services that provide <\/span><span data-preserver-spaces=\"true\">greater<\/span><span data-preserver-spaces=\"true\"> revenue?<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Monthly\/Yearly Cash Flow Analysis:<\/span><\/strong><span data-preserver-spaces=\"true\"> The money left over after covering all expenses for that month\/year, including debt service, taxes, and management fees. <\/span><span data-preserver-spaces=\"true\">Indicates wealth-building.<\/span><span data-preserver-spaces=\"true\">\u00a0 Cash flow <\/span><span data-preserver-spaces=\"true\">is not calculated<\/span><span data-preserver-spaces=\"true\"> by deducting a percentage of income as phantom future expenses.\u00a0\u00a0<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Return on Investment (ROI):<\/span><\/strong><span data-preserver-spaces=\"true\"> Profit relative to the amount invested. <\/span><span data-preserver-spaces=\"true\">There are<\/span><span data-preserver-spaces=\"true\"> several ways to measure a successful investment<\/span><span data-preserver-spaces=\"true\">, including<\/span><span data-preserver-spaces=\"true\"> cash-on-cash returns (the income received from cash invested) and total ROI, factoring in appreciation and tax benefits.<\/span><span data-preserver-spaces=\"true\"> These are real benefits, and <\/span><span data-preserver-spaces=\"true\">smart<\/span><span data-preserver-spaces=\"true\"> investors have an all-inclusive view of how their portfolio <\/span><span data-preserver-spaces=\"true\">is benefiting<\/span><span data-preserver-spaces=\"true\"> them.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Cap Rate:<\/span><\/strong><span data-preserver-spaces=\"true\"> NOI divided by property value. <\/span><span data-preserver-spaces=\"true\">Shows the expected rate of return on a property.<\/span><span data-preserver-spaces=\"true\"> Aids in apples-to-apples asset comparison.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Debt-to-Equity Ratio: <\/span><\/strong><span data-preserver-spaces=\"true\">Amount of debt relative to the equity in the portfolio.<\/span><span data-preserver-spaces=\"true\"> A high debt-to-equity ratio equals higher risk. <\/span><span data-preserver-spaces=\"true\">Helps<\/span><span data-preserver-spaces=\"true\"> assess leverage and financial stability.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Vacancy and Occupancy Rates: <\/span><\/strong><span data-preserver-spaces=\"true\">High occupancy rates suggest stability. Vacancy rates highlight issues in property management or market demand. <\/span><span data-preserver-spaces=\"true\">Helps with market comparisons.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Property Appreciation and Equity Growth:<\/span><\/strong><span data-preserver-spaces=\"true\"> Monitor property appreciation, calculate the increase in equity, and assess whether properties are in areas with favorable long-term trends.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Expense Ratios: <\/span><\/strong><span data-preserver-spaces=\"true\">Includes operating expense ratio (OER), which compares operating costs to gross income. Identifies if its properties are efficient or <\/span><span data-preserver-spaces=\"true\">if<\/span><span data-preserver-spaces=\"true\"> expenses are cutting too much into profits.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Tax Efficiency:<\/span><\/strong><span data-preserver-spaces=\"true\"> Depreciation, interest deductions, and tax-deferred exchanges: How well are you utilizing these benefits?<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Portfolio Diversification:<\/span><\/strong><span data-preserver-spaces=\"true\"> Holding multiple properties across several markets and investing in <\/span><span data-preserver-spaces=\"true\">a variety of<\/span><span data-preserver-spaces=\"true\"> asset classes. <\/span><span data-preserver-spaces=\"true\">Spreads out risk.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Market Comparisons and Benchmarking:<\/span><\/strong><span data-preserver-spaces=\"true\"> Compare portfolio performance against industry benchmarks or similar properties in the same markets. Are you competitive?<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Sensitivity to Economic Conditions:<\/span><\/strong><span data-preserver-spaces=\"true\"> Evaluate projected performance under different conditions, like changing interest rates. Stress testing helps investors plan for adverse conditions.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Exit Strategies and Liquidity:<\/span><\/strong><span data-preserver-spaces=\"true\"> Assess property readiness for a potential sale, refinance, or repositioning. <\/span><span data-preserver-spaces=\"true\">Improves agility for cash acquisition.<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">2. Make the most of what you <\/span><span data-preserver-spaces=\"true\">have<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Now is a great time to invest in new properties, but if your options are limited, it is also a great time to <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/blog.reination.com\/6-ways-to-reinvest-in-your-rental-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">invest <\/span><\/a><em><a class=\"editor-rtfLink\" href=\"https:\/\/blog.reination.com\/6-ways-to-reinvest-in-your-rental-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in<\/span><\/a><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/blog.reination.com\/6-ways-to-reinvest-in-your-rental-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> your existing properties<\/span><\/a><span data-preserver-spaces=\"true\">. Either utilize the money you <\/span><em><span data-preserver-spaces=\"true\">would have <\/span><\/em><span data-preserver-spaces=\"true\">used for a new acquisition or look into a HELOC (home equity line of credit) to finance.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">While you don\u2019t want to over-renovate your properties for the area, it may be wise to update and improve curb appeal, efficiency, flooring, paint, kitchens, bathrooms, appliances, etc. There is never a <\/span><span data-preserver-spaces=\"true\">bad<\/span><span data-preserver-spaces=\"true\"> time to review how we can keep our properties in <\/span><span data-preserver-spaces=\"true\">top<\/span><span data-preserver-spaces=\"true\"> shape.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">3. Explore other avenues of <\/span><span data-preserver-spaces=\"true\">diversification<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">We firmly believe in the value and potential of investing in turnkey real estate. That doesn\u2019t mean we don\u2019t believe in investing in other things. After all, only you can decide the right avenue for your wealth-building goals.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\"> Look into different asset classes and investment strategies. <\/span><span data-preserver-spaces=\"true\">It might be a good idea to look<\/span><span data-preserver-spaces=\"true\"> at the S&amp;P 500, energy investments, or any other investment options.<\/span><span data-preserver-spaces=\"true\"> Just do your due diligence!<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">4. Reexamine risk exposure<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">How well are you <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/blog.reination.com\/this-is-how-to-mitigate-sfr-investment-risk-in-2024\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">managing your risk<\/span><\/a><span data-preserver-spaces=\"true\">? If you\u2019re not actively buying, make your current assets as valuable as possible. Examine your risk exposure and make a game plan to mitigate those risks. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> can include reevaluating insurance coverage, investing in property improvements, or planning for diversification, among other things.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Passive investing does not mean passively sitting idle.&nbsp; You can still actively manage your passive investments and should <\/span><span data-preserver-spaces=\"true\">be looking<\/span><span data-preserver-spaces=\"true\"> for <\/span><span data-preserver-spaces=\"true\">small<\/span><span data-preserver-spaces=\"true\"> adjustments that can pay big dividends.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. You are in control, so make the best decision for you<\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Finally, you can <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.reination.com\/property-listings\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">buy properties<\/span><\/a> <em><span data-preserver-spaces=\"true\">anyway, regardless of the market noise or what other investors are doing. <\/span><\/em><span data-preserver-spaces=\"true\">A stuck real estate market doesn\u2019t mean there aren\u2019t opportunities to take advantage of. Remember, where you invest makes all the difference in the world: target markets with relative affordability, a <\/span><span data-preserver-spaces=\"true\">strong<\/span><span data-preserver-spaces=\"true\"> local economy, and steady demand. Investors can help get real estate \u201cunstuck\u201d by persevering and carrying on as always.&nbsp;<\/span><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Need help figuring out your next steps? Your REI Nation advisor is waiting to help you start on the path to financial freedom.<\/span><\/em><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('DoorLoop Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/how-investors-can-keep-moving-when-the-market-is-stuck',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"wp-block-heading has-text-align-left mt-0\"><strong>This article is presented by REI Nation<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1408\" height=\"1408\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO.png\" alt=\"\" class=\"wp-image-165214\" style=\"aspect-ratio:1.7777777777777777;object-fit:cover;width:452px;height:auto\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO.png 1408w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO-300x300.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO-1024x1024.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO-150x150.png 150w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO-768x768.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/REI-NATION-LOGO-200x200.png 200w\" sizes=\"auto, (max-width: 1408px) 100vw, 1408px\" \/><\/figure>\n\n\n\n<p>Ready to add turnkey real estate to your portfolio in 2024? If so, now\u2019s the time to invest with REI Nation. Where you invest, and they handle the rest.<\/p>\n\n\n\n<p>Discover stress-free real estate investing with the largest family-owned turnkey investment company, REI Nation. Whether you\u2019re a seasoned investor or just starting, they are dedicated to helping you achieve your financial goals in the world of real estate investing. Visit our <a href=\"https:\/\/hubs.ly\/Q02hh_nR0\" target=\"_blank\" rel=\"noreferrer noopener\">website<\/a> to start your turnkey real estate journey, where your success is their commitment.<\/p>\n\n\n\n<div id=button-custom-event-block_63c9a33918e17 class='button-custom-event'>\n      <a href=\"https:\/\/hubs.ly\/Q02hh_nR0\" x-on:click=\"window.analytics.track(&#039;Sponsored Blog CTA Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/how-investors-can-keep-moving-when-the-market-is-stuck&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about REI Nation<\/a>\n  <\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s a new word to describe the U.S. real estate market: stuck. Real estate transactions haven\u2019t picked up as expected, even after conscious cuts to interest rates. Even the Wall [&hellip;]<\/p>\n","protected":false},"author":676,"featured_media":179009,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4433],"tags":[],"class_list":["post-179006","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/179006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/676"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=179006"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/179006\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/179009"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=179006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=179006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=179006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}