It is not official yet, but the signs of a recession are all present, and with the economy grinding to a halt due to the current health crisis, it is hard to deny what is coming. One of the best ways that you can protect yourself during this time is to have a solid financial plan. For some, this will include purchasing one or more investment properties while they are at bargain recession prices. This is a very smart move, so long as you fit specific criteria.

1. You have a safe income

The big issue with buying an investment property during this time is the fear that you might lose your job or your source of income, which is valid. Buying an investment property is an enormous financial commitment, and you need to consider the security of your current financial position. If you are concerned that you or your partner may get laid off during this time, and you need that money to survive, then investment properties are not a magic bullet to keep income flowing, especially right now. If you are, however, in a safe job, or otherwise have a reliable source of income, then now may be exactly the right time.

2. You are in a position to not make a profit in the short-term

This health crisis is complicated, and the government’s response to it is as well. We do not yet know if the government will implement a rent freeze for residential or commercial premises, and both of these groups are getting hit hard by the crisis. You need to be in a position to ride out this period in the same way that many other landlords are being forced to during this time. There is government assistance available and there may be more in the coming weeks, but if you are comfortable trading short-term loss for long-term gain, then you should consider purchasing an investment property.

3. You understand the cyclical nature of the economy

What we are experiencing at the moment is a once in 100-years event, but we will recover. There is always a degree of risk when buying an investment property because there are economic downturns every 10 years on average. You need to know your own tolerance for risk before making a major investment of any kind, but be aware that economic recovery is inevitable, and the bargain property you purchase now may make major profits in the future.

To find out more about investing in property, as well as commercial finance, contact us at Global Capital Commerical today.