WHAT’S NEXT?????
Phew! That was quite a week! Many of us are wondering where the journey will lead to next.
We are all hearing a lot of scary, even “doomsday” type language in the media and social media these days. These events are “unprecedented.” We have entered “uncharted territory.” In less than a month the stock market went from “peak to trough.” There are bear images everywhere!
The other thing we hear is a whole host of predictions about what might be next. Social media, regular media and even world leaders are creating more and more FEAR. Emotions are running high, and higher! Is it time to Forget Everything And Run? Is it false evidence appearing real? How do you separate the fake news from something closer to reality?
What’s a real estate investor to do?
Ok, I’m probably going to break the internet here when I say, NO ONE has a crystal ball! Will COVID-19 last another 2 months, or 6 months? We’ll see. How long will it take for business and supply chains to return to “normal?” We’ll see. Will Russia and Saudi Arabia really flood the market with oil for years? We’ll see. The uncertainty is real. Any predictions are best-guesses at this point.
As real estate investors, we are looking to protect the downside risk. Do we have good tenants? Are we managing the properties well? Do we have positive cashflow? And if we don’t need to sell, for goodness’ sakes, don’t do that!
Let me ask you this: if you have a tenant, who is paying rent, and you have positive cashflow plus a reserve fund—are you in imminent danger? No! That tenant needs a place to live. Could things change at any moment? For example, could a tenant lose their job? Of course.
This is a great time for a strong defensive game for real estate investors. This is the time to manage your people as much as your properties. Luckily, it is time for spring maintenance checks! Talk to all your tenants. Get a feel for their mindset—are they already considering a move? Fix anything in your properties that requires attention. Don’t give your tenants an excuse to move! Show them you care enough to take care of your property and their (temporary) home.
The journey ahead will indeed involve some stormy waters. Your mission—should you choose to accept it—is to remain as rational and strategic as you can. In addition, taking action will make you FEEL like you have a little control. Where the media is seeing death traps around every corner, can you find some calm waters? Is your defensive game designed to keep as many tenants as possible? Better yet, do you see opportunities amidst the chaos?!?
