If you’re new to real estate, you might believe it’s easier to make money in a strong housing market. While that’s true for some real estate ventures, there are ways to make money regardless of the market.
Ultimately, you can make money in a down market and even in a crashed economy.
- Get your real estate license
If you’ve found ways to make money in real estate without a license, you’re on track for major success. While you may not need a license for your current ventures, consider getting licensed to take advantage of a host of additional opportunities.
It doesn’t matter if the current market is down. At some point, the market will come around. For example, Texas has been booming and growing for years, especially in the greater Houston area. Although the coronavirus pandemic has slowed markets across the U.S., Houston will undoubtedly bounce back fast.
If you live in Texas, you’re in the perfect area to become a licensed real estate agent. Start working toward your license now so you’ll be ready by the time the market turns around.
- Locate shadow inventory
Shadow inventory consists of houses that aren’t on the market but should be listed for sale. These properties are generally repossessed, facing foreclosure, or are owned by people waiting for a better time to sell.
If you can locate these homes and convince the owners to list, you could generate a good commission.
- Lower your Airbnb prices temporarily
If you’re an Airbnb host experiencing a drop in rentals, lower your prices temporarily. Unless you’re renting a spot in a tourist town, you can’t expect to get much during a lull. Regardless of why rentals have dropped, lowering your prices is the only way to entice people to choose you over a cheap motel or another Airbnb host.
- Get your Airbnb rental listed in event advertising materials
Reach out to local organizations to find out what activities are happening in your area. When you have a list of planned events, contact the event planners and ask if you can advertise your Airbnb space(s) in their marketing materials.
If the event is big enough and your prices are right, it will be worth paying to advertise your spot. For instance, right before the 2020 Super Bowl, Airbnb put out a call to everyone in Miami-Dade, Broward, and Palm Beach counties to consider renting their homes or spare rooms for the Super Bowl. The 2019 Super Bowl brought each Airbnb host in Atlanta an average of $700.
People love convenience. If you can get your Airbnb host ad in event flyers and brochures, you’re going to get bookings.
- Wait – don’t sell a good home until the market is better
One of the most lucrative skills you can have as a real estate agent is patience. In a down market, that’s not always easy. If you’ve got a home on the market and you’re not getting any bites because of a recession, you might be considering selling at a lower price.
While there’s nothing wrong with selling for a lower price, you also have the option of waiting. Depending on why the market is down, waiting might not be optimal, especially if there’s no indication when the market will rebound. However, if you can hold off just a little while, you might find bigger profits in the long-term.
- Take your properties off the market and rent them out
You’re losing money each day your property doesn’t sell. The fastest way to generate money is to take them off the market and rent them to tenants. You’ll start generating monthly income the moment you sign a lease agreement and get a deposit.
You may not want to be a landlord, and that’s understandable. You don’t have to commit to renting your properties forever. Sign a 6-month or 1-year lease with your tenant(s) and when the lease expires you can choose to keep renting or put the house back on the market.
Renting your properties will provide you with income while the market is down. You may need to lower your rent prices, but everyone needs housing and you will find a renter.
Keep learning how other investors make money in bad markets
There are real opportunities to make money in bad markets, but don’t get caught up in the hype. Find investors who have made money in a down market or during a recession and follow their lead. Only pursue strategies that have been proven to work.