Our mentor, Brad Sumrok, a nationally known educator for Apartment investing, held the masterclass, “Thriving With Apartments During Chaos!” last August 3rd to share strategies on how to thrive during a recession by increasing income through cash flow, syndication fee, net worth, and tax savings.
Today, we're sharing with you our key takeaways:
Employment growth has a significant impact on investments during a recession. High employment rates help the economy recover by increasing consumer spending which, consequently, drives business sales and profits up. As more money is circulated in the marketplace, an opportunity to carefully invest and build portfolios with lower risks open. The millennial generation can be a great predictor of real estate forecasts as they comprise 35% of the total labor force. According to sources, the majority are most likely to rent in the long run since they entered the job market during a recession where student loans and other debts are the priority. Multifamily properties would then be an excellent investment due to its expected increase in demand.
Why is it important to consider an area’s employment rate when allocating your assets?
A location is high in demand when the unemployment rate is low. This means that they are confident in their availability to pay rent and bills.
The U.S. Bureau of Labor Statistics’ latest data (2022) reported that Texas incurred the largest increase of nonfarm employment – with Houston and Dallas being accountable for 224,400 out of 736,700 total job gains. Forbes even named Dallas America's best city for jobs and was ranked number one for real estate investment prospects. Inevitably, investors took these fast-growing cities by storm as they currently own over 50% (and rising) of properties due to healthy returns and strong appreciation rates.
Campbell, K. (2011, September 7). How High Unemployment Hurts Your Investments. Retrieved September 21, 2022, from https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2011/09/07/how-high-unemployment-hurts-your-investments
Roberson & Weiling. (Sep 14, 2022).Texas Housing Insight. (n.d.). Retrieved September 21, 2022, from https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight
If you want to know more about Multifamily Investment, like, follow, and subscribe to our social media channels and email newsletter.