Global markets slowdown fear?

2 Replies

I am in my 20s and looking to buy my first rental property (or first property for that matter). I am somewhat fearful of an economic slowdown. I know the fed just lower rates and that got people exited, but the underlying reason why rates got lower is what worries me.

Any thoughts about an upcoming recession and how to invest with that in mind? 

Originally posted by @Leonardo Chacin :

I am in my 20s and looking to buy my first rental property (or first property for that matter). I am somewhat fearful of an economic slowdown. I know the fed just lower rates and that got people exited, but the underlying reason why rates got lower is what worries me.

Any thoughts about an upcoming recession and how to invest with that in mind? 

Here in California, property values actually held constant or went up 4 out of the last 5 recessions. 

 Sacramento appraiser's blog about that.

We also have about a decade of pent up homeownership demand, the bulk of an entire generation sitting on the sidelines thinking that the "next crash" is right around the corner, and that it'll be identical to 2008 meltdown. In reality, they might just be waiting a while, 1929 and 2008 were  79 years apart. Who is to say that as soon as list prices drop 1%, some of them (growing impatient by the year) don't come out of the woodwork and bid it right back up by 4%.

And if they sit on the sidelines another 10 years waiting for this mystical thing that's ridiculously unlikely to happen, only some of them are in mom's basement. The rest of them need a landlord to write a check to each month...

Hey @Leonardo Chacin

One of the best ways to invest for a recession is to be conservative with your estimates. Also, plan to buy and hold for the long game. I would make sure that your rent estimates are conservative and you are not over leveraged. Also make sure that you are able to save up reserves that will allow you to make repairs and/or pay the mortgage if your property/properties end up being vacant for a little while. 

If you are in a market where house-hacking makes sense, that's a great option. If not, then buy some decent properties that appeal to solid renters. If you buy solid reasonably priced rent houses, you can always sell them to owner occupants if you need to off-load.