How your beliefs affect how you invest in real estate

by | Feb 26, 2019 | How to Guides, Investors

I was reminded this week of a famous quote from Gandhi:

Your beliefs become your thoughts. Your thoughts become your words. Your words become your actions. Your actions become your habits. Your habits become your values. Your values become your destiny.

There is a ton of chatter right now in the real estate space in the US and locally here in Portland, Oregon. Make no mistake that vacancies have risen and rents have come down. There are two opposing views of reality as it pertains to investment property.

Bullish outlook: Interest rates will stay low, Deliveries of new buildings will decline in 2020 and on, Population growth will continue, rent control measures will be a manageable risk factor. If you believe this narrative then investing now with low interest rates and a longer term hold you expect to make a profit when population growth absorbs the available units and creates a new housing shortage.

Bearish outlook: Interest rates will rise which in turn lowers the asset value of a building, Deliveries of new buildings will decline in 2020 and on, Population growth will slow. Rent control measures will scare away future investors. If you believe this narrative then investing now is risky with uncertainty in the political climate and growth trends of our market. Likely with this belief you will wait for a better deal in the future.

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