I’ve been in the real estate game for quite some time now, and I’ve seen firsthand how recessions can be the perfect time to buy assets. While it may seem counterintuitive to some, there are three excellent reasons why a recession is the best time to buy assets like real estate, businesses, and stocks. Here’s a look at those three reasons.
1. Economic Uncertainty Creates Opportunities
One of the main reasons why a recession is the best time to buy assets is because economic uncertainty creates opportunities. When the economy is struggling, and people are worried about losing their jobs, businesses are concerned about not having enough customers. They’re not as likely to take risks. That means there are more opportunities for those willing to take risks. You can take advantage of those opportunities when you buy assets during a recession.
2. Asset Prices Are Potentially Lower
Another reason a recession is the best time to buy assets is that asset prices are typically low during these periods. It creates an opportunity to purchase assets at a discount and then sell them for a profit when the economy improves. For example, if you buy real estate in a recession, let’s say a simple rental property during a downturn, you may be able to sell it for significantly more than you paid for it once the economy picks back up. People are looking for places to live again. It happened time and time again throughout history.
3. You Can Negotiate Better Terms
The third reason a recession is the best time to buy assets (real estate, stocks, businesses, etc.) is that you can often negotiate better terms during these periods. It’s especially true when it comes to things like loans and leases. With lenders being more cautious during a recession, you may be able to work out some creative financing options, such as owner finance or a longer lease term with the option to buy your property. You can make much more money when you negotiate more excellent terms.
These are just three of the many reasons why a recession can be the best time to buy assets. If you’re considering making any major purchases, it’s worth considering doing so during an economic downturn. There are opportunities to be had. Your job now during this pre-recession time is to educate yourself. The time to learn is now, so you’re prepared to take advantage of the opportunities that will present themselves when the recession hits. The last thing you want to do is let a once-in-a-lifetime opportunity pass you because you are ill-prepared.
It’s no secret that recessions can be difficult times for the economy. However, they can also be great times to buy assets. Assets prices are typically lower during a recession, and there are more opportunities for those willing to take risks. Additionally, you may be able to negotiate better terms during a recession. So if you’re considering making significant purchases, it’s worth considering doing so during an economic downturn. The time to learn is now, so you’re prepared to take advantage of the opportunities that will present themselves when the recession hits. The last thing you want to do is let a once-in-a-lifetime opportunity pass you because you lack preparation.