Posted 3 months ago

Why Savvy Investors Are Eager For A 2020 Recession

Why Savvy Investors Are Eager For A 2020 Recession

Many expert analysts are still predicting a US recession in 2020. Why might that be good news for some investors?

2020 Market Predictions

There have been rumors and speculation of a recession for many years now. Most are burned out and are tuned out to it. Yet, analysts and industry pros still say 2020 could be the year it hits. With Black Friday sales starting in October, it is certainly a sign that many businesses are nervous. Lackluster data coming out in quarter one 2020 along with the media mayhem over the presidential election could slow overall growth.

The Downside of the Recession

A national recession that turns into a global recession could certainly be bad for many. Primarily this will first hit small business owners, banks and commercial lenders, and some investors. Over bullish investors who have been on thin margins in volatile assets with no control are the most exposed to risk. Deep cuts to stock portfolios could come fast. Mom and pop house flippers could also feel this impact if home buying slows, and their assets take a temporary hit to values. Though this could take a while to trickle down.

The Upside of a Recession for Multifamily Investors

While we don’t want to see anyone suffer, moments like these do bring great opportunities for savvy and well-positioned investors. We don’t want to see the biggest funds and banks collapse again or millions of homeowners and amateur solo investors losing their houses. Yet, it will probably happen.

From an investment standpoint, some are very excited about a temporary dip in the market. It means asset prices coming down due to unprepared competition. It’s the chance to lock in new assets and better yields. At the same time, demand for rentals would only grow. Rents will remain strong and growing sustainably.

This asset class also offers value add opportunities and the ability to control the value of your own assets.

The best opportunities are likely to reside outside of NYC and San Francisco. Though weakness and deep cuts there will see prices come down the most.

How will you invest in 2020? Will you make the switch in time?