Title Your Real Estate Career Should Enhance Your Life, Not Define It
Volatility and uncertainty are two words that clearly define the current state of the real estate market. Still, regardless of the changing landscape in real-estate investing, it has sparked many individuals to strike the opportunity of making the most with the Covid-19 induced economic recession. As a result, alongside the sudden surge in cryptocurrency investing, more people are looking into real estate careers as a way of guaranteeing their financial freedom in the long term during the current market downturn.
However, while we strongly commend those grasping their future by their hand, we have reason to believe that many newcomers are wrongly motivated by dreams of catching the wave of economic recovery and timing the market in their favor. And, while it’s entirely possible to set yourself for life with the right decisions in place, defining the next few years to come by your real estate career alone without recognizing the risks will set you up for failure and regret.
A Market Of Opportunity And Equally Terrifying Risks
It’s true that during trying times is when life-changing opportunities present themselves. Still, we must also look at it because the same market also carries equally terrifying risks that could do the same damage otherwise. And all it would take is one slip-up or a single moment of getting too ahead of yourself for one unnoticeable detail to leave your attention and make everything you’ve built up crumble to your knees. Plus, considering that the real estate market is more than capable of recreating this situation a hundredfold, newbies must proceed with this new career with caution.
- Soaring Demand And Limited Housing Supply: Currently, there’s soaring demand for new homes and a minimal housing supply to top it all, making it a seller’s market and a dream for those already holding key properties to offer. However, the same situation was reflected during the housing crisis, and if the pessimists were to be proven correct, it wouldn’t be long until an event to pop the bubble. Sure, prices are high, and you’ll get multiple offers, but don’t take on too much.
- Global Shortage Restricting New Developments: We’ve established the people want homes. They want them now, but the depleted global supply chains make it near impossible to start new housing developments because we are currently facing shortages. For example, lumber has drastically risen in price now that the US is facing a shortage of resources, making the prospect of building new homes less financially feasible.
- Home Sales Are Unexpectedly Plunging: Lastly, despite the enticing home prices that appeal to sellers, existing home sales are down by 2.7%, and the current trend points to more decline. Therefore, you might not even be able to sell a home. The indicators show an explicit contradiction between demand and the realized home sales, making it even riskier for those new to their real estate aligned professions.
But Value Your Career And Safeguard Your Livelihood With Competence
Of course, we are by no means dissuading people from investing in a real estate career because it’s a career path that will inevitably teach you methods of guaranteeing long-term financial security. However, given the volatile and uncertain nature of the current real estate markets, you must safeguard your livelihood with competence instead of overindulging yourself with career goals and yet-to-be-realized dreams.
1. Know Your Way Around The New Marketplace
Times are changing, and the same is happening to the real estate marketplace, so you should start to know your way around it as soon as possible. From connecting with key stakeholders and making valuable strategic partnerships, you could quickly grasp the overall market sentiment in your locale and position yourself to make the most profit in the ideally safest way possible. For example, understanding trends in homeowner insurance helps you approach your clients’ interests better and more professionally.
2. Understand The Change In Homebuyer Demand
People want different things from a house, and with the new normal, homebuyers’ behavior is also shifting toward the emerging needs and challenges brought about by the global pandemic. For example, now that remote work is here to stay, and there will always be a reliable remote workforce staying at home, expect an increased preference for homes that could offer separate office space. So, when renovating or fixing up a property, always consider how you can meet the change in homebuyer demand.
3. Balance Your Risk Appetite
Last but not least, we recommend that you balance your risk appetite and acknowledge when you’ve bitten off too much than what you can handle. Far too many uncertain variables are currently at play, and if you don’t have enough liquid cash to meet an unexpected crisis, the market will liquidate your assets for you and put you back in square one or, worse, in more debt.
Don’t Stretch Yourself Too Thin.
In conclusion, you don’t want to stretch yourself too thin by focusing too much on your real estate career without recognizing the red flags all around you. Take a step back and always analyze every deal you plan on doing so you can mitigate any looming risks beforehand.