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Business Times: How Some Investments Are Still Better During Recession than Others

January 29, 2019

By Gerome Lucas

The recessions during the 2000s are still fresh in the minds of real estate investors and those who lost their properties during the period. The US managed to recover, particularly the housing market, but the concerns are still there. Mansion Global cited that homeowners and property investors still prefer to remain cautious, resulting in the slowdown of the real estate market.

It's only right for investors to be cautious, analysts state. The market is highly volatile in its state today. They can stay away from the stock market all they want, but they can't go ahead and just put all their eggs in the real estate market basket. Richard Green, USC Lusk Center for Real Estate in Los Angeles director, said that real estate is not really known to be 'immune to recessions.'

Investors should not think of any investment as 'recession-proof,' he added, although he was also quick to point out a solution. There are other properties, such as multi-family homes in low-supply, high-demand locations, and designer homes, that can be considered good investments. Not completely recession-proof, but they are designed to be alternative investments during a lean time.

There are those who would say that no two assets are alike. This is true, as analyzed by Cashflow Connections' review. A good majority of these investments are reliant on economic factors working together to prosper. However, it's easier said than done that these investments will keep on agreeing with each other.

The time right now is for another form of investments. The article noted examples such as vacation homes, mobile home parks, real estate notes, and self-storage facilities as good investment engines. The similarity in investments like these is that they are a service, and the demand for them is unaffected by any kind of recessions-in some cases, the dependence on them is increased.

There are some ways to protect property, as pointed out by experts, from a costly recession. Concentrating on the improvement of a home is one way to keep these investments from going stale. When the recession comes, an investor or homeowner can sell this asset for a substantial profit, or lease it to someone with the money. A good example is vacation homes close to the beach.

Downturns can be costly for owners, while it can be a heaven-send for those looking to invest. It pays to diversify to avoid having the negative effects of recession weigh properties down.


The original article can be found here.