permit single-room rentals. Check with your locality.
11. INVEST WISELY If you do have some cash to add a rental property, invest with the 1% rule in mind: Your monthly rental rate should be at least 1% of the purchase price. Finding a property that is ready to rent at a lower price and being able to afford to snap it up and rent it fast is a great way to safely boost your bottom line when the economy is in a downturn. 12. EXPECT THE WORST It may seem counterintuitive, but a good time to put your rental prop- erty to the stress test is when finan - cial skies are blue. Assume one or all of the worst-case scenarios: • Tenants don’t pay for 90 days. • Vacancy rates triple. • Property values plummet. Could you survive each of these situations? Make changes before a recession hits so that you can weather any of these situations. A recession can be devastating for investors who aren’t prepared. Be proactive to protect yourself during the downtown and position yourself for a positive future. •
Luke Babich is the co-founder of Clever Real Estate, a real estate education platform committed to helping homebuyers, sellers, and investors
make smarter financial decisions. Babich is a licensed real estate agent in the state of Missouri. His research and insights have been featured on BiggerPockets, Inman, the Los Angeles Times, and other online and media outlets. Babich earned a bachelor’s degree in political science, with honors, from Stanford University.
12 | think realty magazine :: september – october 2023
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