Safeguarding real estate porfolios in uncertain times
Investors are always wary of circumstances that could adversely affect their investments. In times of global worry and economic crisis, real estate investors need to be mindful of safeguarding their portfolios to weather the storm. Business is not as usual in British Columbia in these times and even lenders have revisited their lending policies, which is affecting investors — especially those with high margin investment methods such as student rentals, flipping, short term rentals and construction.
Some investors have actually sold some of their properties, while some who can afford it have decided to lower rents for tenants who are having hard times financially. Experts suggest investors should talk to their mortgage advisors about the issues that could affect their portfolios: opportunity, agility and stability. They want to minimize as much financial distress as possible.
Opportunity entails setting up a plan to be able to continue building a portfolio and continue to build wealth. Setting up financing that adheres to new lending rules makes sense. Agility speaks to creating some wiggle room every month by looking at debt restructuring to free up cash flow. Stability entails making sure there is enough to liquidate and enough reserves to allow a disruption in employment or rental income, which could possibly be done through mortgage deferrals.
A British Columbia lawyer experienced in real estate law may be able to help an investment client in these types of uncertain situations. Real estate purchases and sales don’t just stop amid trying times. A lawyer is an integral team member on the real estate playing field and his or her legal knowledge may be crucial prior to, during and after inking a deal.