The battle between recession and real estate...

Economic recession defined: A recession is  a general downturn in any economy highly associated with a drop in the stock market, an increase in unemployment, slow gross domestic product and high inflation. The blame for a recession generally falls on the federal leadership, often either the president himself, the head of the federal reserve, or the entire administration.

The concept of recession happens time after time especially with the Nigerian economy, hence we should gird up our loins with all forms of financial security. 

Quick nuggets for you

•  Don’t worry about interest rates or the economy. How often have you heard people whining about government policy, the building industry, rising interest rates etc. How often have you found yourself discussing and debating whether the economy is poised for growth or slipping toward a recession, whether interest rates are moving up or down, or whether there is inflation or deflation? Have you ever done anything about it?

 STOP… and give yourself a break. Don’t continue to waste your time and energy analyzing the economy OR assuming where or what the economy will be, thus buying property to fit neatly into that grand assumption.

My opinion is this, no-one has economic predictive powers and secondly, if you must buy your investment to suit a particular economic environment, you could be destined for failure.Time, location and the decision to own an investment property  with the ability to profit in any economic environment is not just profitable but also wise.

•  Buy a business NOT a ‘Liability'. Before you start arguing that a property is not a business, STOP. An investment property is a business and must be treated as such. Once you have got your mind around treating your investment property like a business and that you have decided to invest in this business, once this decision is made it cannot be changed.

 Further more you have to hold this investment for ten years. Ultimately the wealth generated from this business ownership will support you in your retirement. 

Now, questions to ponder about prior to investing in this business are 

• Does the business have terrific long-term prospects?
• Is management honest with me?
• Look for properties with high profit margins
• Focus on your return on capital
• Demand for the business product 

Being a successful and accomplished investor, one who has used real estate to substitute income is like being a world class athlete and by this it takes more effort than merely just joining a gym. Being a successful property investor takes more effort than attending a seminar or course and expecting to know everything.

The truth is that no one can tell you where and how to invest. It is all up to YOU. Attending seminars, courses and workshops as well as reading books certainly does help.