Trying to keep up with the economy from one day to the next is a lot like trying to keep up with the wind. The economy may be high one day and low the next, and understandably, this may make you feel unsettled as an investor in Alberta, Canada. The good news? Overall, real estate is still a promising area to invest in, according to the experts at Investar USA. Still, you should be aware of how economic changes could affect your returns, which we’ll take a look at here .
The first potential economic change worth exploring is a dip in the economy. The reality is, real estate, which the stock market impacts, is a cyclical area of the economy. As a result, even though the economy may be relatively strong right now in North America, it could contract in the coming years if a global recession strikes. So, what does this mean for investors in Canada? It means that existing commercial real estate’s performance may experience some downward pressure.
Second, you may see the interest rate rise in the future, and this could have an adverse impact on the commercial real estate market. Why? Because even though a rising interest rate may signal a growing economy, a sudden rate hike could make it harder for people to obtain capital for property development. As a result, real estate building efforts may come to a haltslow down.
Because the economy is so unstableebbs and flows over time, the smartest move you can make as a real estate investor is to diversify your real estate investmentsnot be overleveraged and lock in low the interest rates that are available today for as long as possible . In other words, invest in various types of commercial properties.Succesful real estate investing is all about keeping things simple. Invest in an asset class you are comfortable with, buy and hold for the long term and have someone else payoff your mortgage. This will enable you to enjoy real estate’s anticipated steady growth in the future while also more easily withstanding any economic bumps that might affect the market down the road.
