Is A Recession Right Around The Corner?

This morning I was doing some reading in order to get up to speed on an upcoming blog topic and I noticed a trend.

Do you know reporters, bloggers, Youtubers and social media influencers have been telling us to prepare for the upcoming recession since 2019?

So, had we followed their advice, we would have refrained from buying anything in the lowest interest rate environment in decades. We would have lost out on almost a decade of appreciation, depreciation, cash flow and rent increases.

It just goes to show the only time we really knew if we were headed into or actually in a recession was when we saw it in our rearview mirror.

Here’s what should really matter to housing providers. Most of the time, rental rates increase during a recession if and when one actually happens. This is because there is greater job instability, meaning more people are either afraid to buy a house, or can no longer afford the one they live in. So they rent.

More renters means more demand. And, as the nation as a whole has a shortage of rental housing, demand will exceed supply. That means rents rise.

Of course, there is an exception to every rule. In 2008 rent rates dropped 2.8 percent nationwide. In other words, the two-bedroom apartment that previously rented for $1500 may have brought in $1458. While that isn’t great, it also shouldn’t break the bank.

If it isn’t already apparent, this should underscore that investing in real estate is a safe play during a recession.

That is, if, and when we ever have one.