April 4, 2024
By: Travis Watts, Director of Investor Development
Three Practical Steps to Shape Your Own Economy:
- Market Opportunities: Market shifts, such as fluctuations in interest rates, present opportunities for savvy investors. For instance, the recent rise in interest rates has led to a decline in commercial real estate prices, offering an opportunity to capitalize and “buy-the-dip.” At least for those willing to take action.
- Short-Term Spending: Wage increases, and high inflation have no doubt impacted consumer prices. Take for example restaurants increasing their prices. While this may be the case, the reality is we can adjust our spending habits – opting to dine out less frequently or cooking at home – we can mitigate the effects of this inflation on our personal budget. It is simply a choice.
- Long-Term Savings: Rising fuel prices might prompt consideration of alternative transportation options, such as electric vehicles. Likewise, escalating electricity costs could incentivize investment in renewable energy sources like solar panels. These cost savings can continue for years to come.
Multifamily Investments Beyond the Headlines
In a world inundated with ads, opinions, and fear-based headlines, it can be useful to take a step back and consider our own individual reality from time to time.
I recently had an epiphany during a conversation with an investor as we discussed the multifamily real estate sector. The classic question arose, “Is now a good time to invest in multifamily?” His concern was prompted by a news report he had read. The report suggested that apartment rents could soften in 2024.
Reflecting upon this information, I could not help but consider the multifamily investments I have made over the past year. In the deals I have been involved in, the rents are steadily on the rise; many of them are on track to achieve a 5-10% rent increase by the end of the year.
This reflects investing in value-add business plans where an older property is purchased at a discount because it needs renovation and has below market rents in place due to its outdated condition. The business plan is simply to renovate and improve the property, while increasing the rents back to the market level.
So, the disparity between “rents declining” according to a news report and “rents increasing” according to my actual portfolio, underscored a fundamental truth: our perspectives shape our reality.
Scenarios to Consider:
#1 If a news report stated the national median household income was $75,000, but your personal income was $150,000, the report would hold little relevance, because your personal economy is what matters to you.
#2 If a news headline stated “US inflation peaked out around 9% in 2022, Americans are now scrambling” the reality is your individual inflation rate could have varied significantly based on your specific circumstances that year. For example, if you chose to cut your expenses by 9% in 2022, you might have experienced minimal inflation impact, even none at all.
Building Your Financial Future Beyond Media Narratives
The point is: you are the architect of your own reality. It is not dictated by headlines, news, or media narratives – it is determined by your choices, and actions.
We control our own economy, and we can steer our financial future toward success, despite what is on the news or in the media. With uncertainty and economic volatility, opportunities are reserved for those willing to act. By remaining adaptable during market shifts, we can navigate the ever-changing economic landscape with confidence and resilience.
Want to learn more about multifamily investment or our current offerings? We welcome you to schedule a call with our investor relations team today.
