Now that we’re into August, our market is slowing down and starting to soften a bit. If this means we’re headed for a downturn, there are four things you can do to prepare yourself.
First, take a look at your mortgage note and make sure you’re in a good position before rates go up. If you have an adjustable rate mortgage, find out what your options are to get it fixed in case you plan on living in your property for a long time.
If you’re an investor, evaluate your real estate portfolio and consider getting rid of any properties that aren’t performing well. If you have one or more properties that aren’t doing well or have a lot of deferred maintenance attached to them, now’s the time to decide whether you’re better off selling them now before something potentially happens sometime down the road.
If you’re a landlord and you have tenants living in your property, put together some longer-term lease contracts so you can lock in the current lease rate. Typically when property values decrease, so do rental rates. While you may not want to do this because of the possibility that rates will rise, think about what could happen if your tenants want to renew their leases in six months and rental rates have plummeted in the meantime.
Lastly, check if you have any credit from your home equity line of credit that you can use. Before the last downturn, a lot of people had credit from their home equity line that they were going to use but were prevented from doing so by their lender once the market started to turn. If you need access to those resources, talk to a CPA or your financial planner.
If you have any more questions about what you can do to prepare for a market downturn, don’t hesitate to reach out to me. I’d be happy to help you.