What Risk Mitigation Strategies Are You Using To Hedge Against A Market Correction or Crash

[Brandon Hall]

I will be acquiring my first rental within the next 30 days, and I started thinking about what strategies I can utilize in the future to mitigate risk and hedge against a market downturn. I'm not saying one will happen soon, but one will likely happen again in my lifetime and I'd like to be prepared for it. 

Do you buy properties in several different locations? Do you focus on metro areas? Do you have a portfolio of commercial, mfh, and sfh? What will you do if your rental market dries up?

These are the questions that have been crossing my mind recently. I realize I'm new to the game, but I think risk planning should occur sooner rather than later. 

[J. Martin]

BEING PREPARED FOR MARKET DOWNTURN:

1) RESERVES, RESERVES, RESERVES! Keep cash on hand.

2) Buy with enough margin for a correction (in equity and cash flow, if it fits your strategy.)

3) High-demand areas w/ people and jobs, reasonable commutes to employment that are a good value.

Others?..

@Brandon Hall