According to the latest data, Minto Apartment Real Estate Investment Trust (TSX:MI.UN) has a current suggested portfolio ownership tally of 0.05970 (as a

What should real estate investors do to safeguard their investments in the event of an impending recession?

What should real estate investors do to safeguard their investments in the event of an impending recession?

If you think a recession is coming (I do, but others can disagree), there are a few things, depending on what your business model is. That is: Are you a wholesaler, a rehabber, a landlord, or something else? There’s a different strategy for each.

Wholesaler: Keep an eye on prices, days-on-market, and inventory. Lower your offers a bit, but don’t worry about it. You have almost no financial exposure even if you can’t get rid of the property. And the turnaround time from putting the property under contract to assigning the contract should be 30 days or less. Use the threat of a recession to your benefit. Tell the seller: “Sell for more now. If there’s a recession, you may have to sell for a lower price for a year, two years, or even longer.”

Landlord: If you’d planned on selling within the next couple of years, you might want to sell. Otherwise, it doesn’t much matter. Yes, the value of your investments may decline. But rents generally stay quite steady. If you’re collecting, for instance, $1,500 in rent on a $200,000 property, you’ll still be collecting $1,500 in rent if the property’s value drops to $150,000. That’s what happened during “The Great Recession” and other declines. If you’re smart, you’ll buy when there’s been a significant decline in prices . . . so long as you’re getting a good cash flow.

Rehabber: This is the riskiest position by far. You may buy a property today, based on comps from 3–5 months ago, take 5 months to rehab, and face 60 days (or a lot longer) days-on-market. In other words, there’s at least a year’s interval between the time you figured out what you should be able to sell the property for and the time you actually sell the property. No problem if the market is flat, but if the market declines, you won’t get your anticipated selling price. And you likely will end up holding onto the property (with all the associated expenses) for months longer than you’d planned. If you’re a rehabber and are seriously concerned about a recession, I’d suggest you consider wrapping up your current projects and then using your funds for something else. Short-term, perhaps, wholesaling. And then when the prices really drop, purchase some bargain-priced buy-and-hold properties.