Navigating the Tides: How Current Economic Events are Reshaping Real Estate

[Bubba McCants]

Hello BiggerPockets Community!

I hope everyone's investments are thriving as we navigate the ever-changing currents of the real estate market. I thought it would be valuable to kick off a discussion about the latest economic headlines and their impacts on our strategies.

1️⃣ Interest Rates on the Move: With recent fluctuations in interest rates, how are you adjusting your financing strategies for acquisitions and holding properties?

2️⃣ Housing Market Predictions: Analysts have various opinions on the housing market's trajectory. Are you bullish or bearish in the short and long term, and how are you planning to adapt?

3️⃣ Rental Market Trends: As rental demands shift, particularly in urban vs suburban areas, what trends are you noticing, and what moves are you considering?

4️⃣ Inflation's Double-Edged Sword: Inflation means various things for real estate investors. Costs are up, but so are asset values and potential rent increases. What's your take on this?

5️⃣ The Tech Transformation: From PropTech to TikTok marketing, technological advancements are changing how we interact with real estate. Have you adopted any tech-forward approaches lately?

Let's leverage our collective wisdom to gain clarity and confidence in our investment decisions. Share your insights, experiences, and strategies in light of these current events.

Looking forward to an enriching exchange of ideas!

RealEstateInvesting #EconomicImpact #MarketTrends #BiggerPocketsCommunity

[Jonathan Klemm]

Hey @Bubba McCants - Tons of great questions....curious to your response to these questions as well for me here in Chicago:

1.  Same strategy -> Let the data drive decisions (include updated tax, interest rate, rent numbers, etc.)

2.  Always be buying!  

3.  Rents have gone up quickly in metro Chicago area, but there seems to be more open inventory than the last couple of years.

4.  Inflation is in general bad for the lowest people on the totempole which is someone what counterintuitive.  Giving tons of small amounts of money out to people during covid looked good at the time, but caused all this inflation.  It's sad the cycle our goverment wants to keep us in...

5.  I love technology and believe you don't stay up with the times they will pass you by (eventually).  Being open and willingly embracing change is a skill and not an easy one to develop.  I believe in small incremental changes over time lead to big results in the long term!

[Bubba McCants]

Quote from @Jonathan Klemm:

Hey @Bubba McCants - Tons of great questions....curious to your response to these questions as well for me here in Chicago:

1.  Same strategy -> Let the data drive decisions (include updated tax, interest rate, rent numbers, etc.)

2.  Always be buying!  

3.  Rents have gone up quickly in metro Chicago area, but there seems to be more open inventory than the last couple of years.

4.  Inflation is in general bad for the lowest people on the totempole which is someone what counterintuitive.  Giving tons of small amounts of money out to people during covid looked good at the time, but caused all this inflation.  It's sad the cycle our goverment wants to keep us in...

5.  I love technology and believe you don't stay up with the times they will pass you by (eventually).  Being open and willingly embracing change is a skill and not an easy one to develop.  I believe in small incremental changes over time lead to big results in the long term!

 Hey @Jonathan Klemm, hope you are doing well in Chicago!

1.)  Look more into a long term hold strategy, if I can get an interest rate where I can break even or even go in the Red a little where the house is being paid for mostly by the tenant then I will look towards the appreciation down the road.  Also look into refinance down the road as well.

2.) I agree with you always buy!  kind of like stocks or crypto, Dollar Cost Average is how I look at buying Real Estate.

3.) Rents have increased tremendously since our area got hit by Hurricane Michael, we had a vast shortage of rental properties, and prices went way up!  Now with the economy the way it is the prices have not come back down and probably have increased a little more.  Property taxes and Insurance in our area is the biggest factor we are dealing with.  We are still in hte process of buying when we find the deals we can work with.

4.)  The rising costs can erode profit margins, make renovations more expensive, and increase holding costs. On the other hand, real estate is traditionally seen as a hedge against inflation. As costs rise, property values and rents often increase as well, which can benefit long-term investors.

5.) I am like you, try to stay on the cutting edge of technology as I believe if you do not you will be left behind, especially in the real Estate industry.

[Dave Meyer]

1. Look for deals that work with current rates. Not gonna change my long-term approach due to short-term market conditions. The one tactic I'd recommend for those who can afford it, is putting down more equity (30-40%). 

2. Oh boy, too much to write here, but my forecast for 2024, as of last September, was for prices for residential to be flat on a national level by the end of the year. Long-term bullish which is all I think about since I buy and hold. 

3. Rents will flatten and turn negative in markets with oversupply in MF housing (Denver, Austin, Vegas, Phoenix, etc.)

4. Inflation stinks for everyone, it just stinks less for real estate investors. It motivates me to buy. 

5. Nope. 

[Jacopo Iasiello]

While the housing market may experience short-term fluctuations, I remain bullish on real estate in the long term, especially in markets with strong fundamentals and growth potential. To adapt, I'm focusing on thorough market research, diversifying my portfolio across asset classes and locations, and maintaining liquidity to capitalize on emerging opportunities.

[Bubba McCants]

Quote from @Jacopo Iasiello:

While the housing market may experience short-term fluctuations, I remain bullish on real estate in the long term, especially in markets with strong fundamentals and growth potential. To adapt, I'm focusing on thorough market research, diversifying my portfolio across asset classes and locations, and maintaining liquidity to capitalize on emerging opportunities.

Completely agree with you, I am a Real Estate Agent in Panama City Beach, Fl.  and the long term growth is where it is at!  We are constantly having to change with the market and keep up on the trends.