Time to Recession-Proof Your Business?
March 12, 2020
The COVID-19 coronavirus outbreak is creating a slowdown in economic activity. The stock market plummeted this week, and anxious consumers and companies are curbing travel, conferences, dining, lodging, and other spending. Real estate pros may want to start making a plan now, just in case a slowdown in home buying and selling does occur.
Whether you're early in your career, nearing retirement, or in-between, George Ratiu, a senior economist at realtor.com®, suggests starting with an assessment of your financial situation. Compare your earnings to how much you spend on housing, utilities, food, transportation, travel, entertainment, gifts, and other items. See if there are spots where you can make cuts, if you feel that is necessary at this time. Build up cash reserves to sustain you through any tough cycles ahead. Financial planners typically recommend having enough cash to cover three to six months of expenses.
If a recession occurs and your sales take a hit, explore another business niches to draw in revenue, such as by taking on relocations, referrals, exchanges, or even property management, suggests writer Carrie B. Reyes for First Tuesday, a real estate education program. Also, look to boost your education to help build revenue streams. The National Association of REALTORS® offers several. Expand your farm area to additional neighborhoods and increase the delivery and frequency of your marketing to get messages out about the market and record low mortgage rates to reassure buyers and sellers about conditions.
Economists say that low mortgage rates could soften the impact on sales this spring. “Although most people think of recessions with dread, it is worth keeping in mind that they can also be periods of opportunity, especially if you are prepared,” Ratiu writes. “As the last recession demonstrated, while asset markets declined, many prepared buyers found treasures, often in low-priced homes.”
“Real Estate Reality: How to Get Ready for a Recession—Just in Case,” realtor.com® (March 11, 2020)
Updated: July 02, 2020