Adapting real estate investment strategies to economic shifts

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This according to Lew Geffen Sotheby’s International Realty chief executive officer Yael Geffen, who says whether navigating periods of global economic uncertainty or capitalising on stable, bullish markets, understanding the advantages and adjusting strategies accordingly can make the difference between success and stagnation.

“History has demonstrated over and over again that property is a good international investment no matter how volatile the markets.But while the value of the asset class in volatile times is ubiquitous, investors’ approach to the market must adapt to those opposite conditions; whether it’s up or whether it’s down. Applying a universal wealth-creation strategy regardless of market conditions, is nothing short of dangerous.”

Geffen delves into savvy market investment strategies:

Bearish market conditions:

1. Focus on cash flow: Prioritise properties with strong rental income potential, such as multi-family units or affordable housing, to ensure consistent cash flow.

2. Target distressed assets: Look for undervalued or distressed properties that can be acquired at a discount and improved through renovations or better management.

3. Adopt a conservative approach: Avoid over-leveraging and maintain sufficient liquidity to weather potential market downturns.

4. Embrace long-term thinking: Focus on the long-term appreciation potential of real estate rather than short-term gains.

More stable, bullish economic periods:

1. Leverage favourable financing: Take advantage of low interest rates to acquire properties or refinance existing loans, improving cash flow and returns.

2. Diversify into commercial real estate: Explore opportunities in office, retail, or industrial properties to capitalise on business growth.

3. Focus on appreciation: Invest in high-growth areas or emerging markets where property values are likely to rise significantly.

4. Optimise portfolios: Sell underperforming assets and reinvest proceeds into higher-yielding opportunities to maximise returns.

Geffen notes that historically real estate has been a versatile and resilient investment, capable of delivering value in both changeable and stable economic environments.

“During periods of uncertainty, property’s role as a hedge against inflation, source of stable cash flow and provider of long-term appreciation makes it an attractive option. Conversely, in bullish markets, real estate benefits from rising demand, favourable financing and increased liquidity, offering opportunities for growth and diversification.

“The key to success lies in adapting your investment strategy to align with the prevailing economic conditions. By understanding the unique advantages of each market environment and making informed decisions, investors can navigate the complexities of real estate wealth creation and achieve their financial goals, regardless of the economic climate.”

Geffen says whether you’re seeking stability in turbulent times or capitalising on growth during prosperous periods, property offers one of the investment landscape’s most secure paths to the creation of enduring wealth and success.