What Would Happen With Another 2011 Crash?
TL;DR - Rather than focus on speculation, work on becoming a prepared real estate investor.
Inflation is rising, prices are rising with it, and the economy isn’t looking so hot.
It’s only natural to think that the housing market might crash soon.
Normally, this would be the part where we’d say, “Don’t worry, the market will never crash!”
But…
What if it did?
What if housing prices dropped to 2011 levels?
What would the outlook be for real estate investors?
Let’s take a one-way train to hypothetical-ville and see what’s up.
What Would Happen With Another 2011 Crash?
It’s All Speculation
At the end of the day, that’s all this talk is.
We can guess and forecast and predict as much as we want…
Would that change anything?
No. It just gets us nervous and scared to take action in the present — the only thing that matters.
You have dreams of investing in real estate.
You can’t wait for the day that your passive income will let you:
Travel the world
Buy that luxury car
Provide for your family
Give you time and freedom back
Retire
So does putting investing off because of fear — of something that’s by no means set in stone — make sense?
Do you want to live the life you dream of?
Because the people who are winning are the people that take action.
Whether there’s risk or not, reward or not, market crash or not.
If you find a great property deal, then pursue it.
Because the only thing you truly have is today.
A housing market crash is speculative.
Your investment portfolio, actions, and results?
That’s fact.
Don't let the fear of a housing crash stop you from pursuing your real estate investing dreams.
What Would Happen?
Let’s say the housing market does crash.
And it’s a big one. Like 2011 pricing bad.
That would be a tough pill to swallow for many real estate investors and homeowners alike.
Appreciation rates would fall through the roof. Home valuations would drop to what they were in 2011 — over a decade ago.
But this hurts one group more than it does the other.
Homeowners
In this situation, homeowners would be the biggest losers.
As a homeowner, your property is one of your largest investments.
You treat it right, improve it, and hope it increases in value over time.
Still — you aren’t directly making money off it.
Usually, you’re paying down the mortgage by yourself or with your spouse.
You don’t get any income from your property until you sell it. And that’s if you took care of it and it appreciated over time.
With a housing crash, homeowners would lose the ability to sell their property without taking a HUGE loss.
They’d essentially be stuck in their homes until the market got healthy again.
Or even worse — since rampant inflation, price increases, and unemployment coincide with crashes — homeowners would lose their homes.
This would force them to become renters once again.
Real Estate Investors
And who benefits from a rising population of renters more than investors?
Sure, a downturn of appreciation would hurt investors’ portfolio value and net worth — but those numbers are almost imaginary.
The real money is in cash flow and rental income.
With demand rising, rent rates would skyrocket.
Becoming a renter would be more competitive and therefore, rates would be too.
That added rental income would help real estate investors pay off their mortgages quicker. Not to mention cover them during a period of inflation.
Add to that an increase in the available supply of houses in the market?
Sure, most people wouldn’t be able to purchase new properties during this time.
But investors who have been stocking up their reserves for a moment like this would.
They’d be able to add properties to their portfolios for prices nobody has seen in years.
Years of inflation would be erased, which would make real estate investors happier than kids in an Apple store.
A large market crash would hurt a lot of people.
But in the long run, it’d make the rich richer and the poor poorer.
Just Be Prepared
Things like housing crashes are highly speculative.
You shouldn’t waste your time fearing the start of one.
Rather, take the time to prepare yourself for if one ever did happen.
Learn to:
Be a better investor
Build and grow your industry connections
Manage your finances and increase your reserves
Scout markets you have an interest in
Differentiate between a bad deal, a good one, and a great one
Make your properties attractive to renters
Instead of worrying, better yourself.
That way you can take action when others won’t.
This will allow you to build the life you dream of rather than waiting on the sidelines.
All that’s left is to get after it.
Happy Hunting!
How We Can Help You
Does investing in real estate sound intriguing to you? Would you like to learn more? We’d love to be of value!
At Undoor, we pride ourselves on teaching new and experienced investors how to maximize their gains with minimal stress. Our goal is to help you fall in love with real estate and real estate investing!
Do you want to get key insights and advice that’ll help you get ahead of the game? Don’t hesitate to contact us for any and all real estate wants or needs.
