From Beardy Brandon:Why RE is the top investment in a bear market

From Beardy Brandon:Why RE is the top investment in a bear market

Investor · Las Vegas, NV · Member since 2020 · 153 posts · 136 votes

Brandon Turner posted this on his IG recently from the Multi-Family Investor Network Conference and I thought it was a fantastic hit list of why RE is still the top investment vehicle, even in a bear market. This was specifically meant for MF, but I think a majority of it still applies to smaller properties (1-4 units).

• Rents are increasing
• Housing shortage
• Low interest rates (Commercial interest rates are still low compared to residential interest rates, 1-2% lower in some areas)
• Investors less trusting of Wall Street
• Real Estate is proven (Unlike Crypto, which is still setting its foundation
• Tenant-Landlord laws
• Tax incentives

When people are consolidating, when people are playing defense – that's the time to get aggressive and make deals. Anyone have anything to add to the list?

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Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y

None of us know what will happen with MF or with global economies but one certainty is that high housing prices coupled with high interest rates will help support the rental market in a nontrivial way.  That does not mean there will certainty of high rents or that property values won't decline...just means that rent levels in growing locations have a huge risk mitigant through the cycle.

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  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y

    My rents exploded during the last recession. My rents are exploding during this current recession. (Assuming we are in a recession)

  • Chris SeveneyBusiness Member
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    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Juan V Lopez

    I personally do not believe the rent growth is sustainable - by that if you are underwriting at 3-5% increases over next five years in some markets I do not believe it will happen. I have zero data to substantiate this besides my gut and reports that cell phone payment delinquency is rising as well as car loans - which are typically the first two things people pay.

    That’s what my crystal ball says today and I am wrong all the time. Just ask my wife.

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  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    4y

    None of us know what will happen with MF or with global economies but one certainty is that high housing prices coupled with high interest rates will help support the rental market in a nontrivial way.  That does not mean there will certainty of high rents or that property values won't decline...just means that rent levels in growing locations have a huge risk mitigant through the cycle.

  • Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    4y

    I don’t see wages going up.  And I also think people working at home on a laptop is a scam that will not last.  But I also see the government stepping in to protect all us investors from a crash.  Could be wrong but that’s how I see it going down.  If the market could operate unhindered we’d all be dead but I am putting my money on those days being over.

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