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Turn Your Equities into Income

During a recession, cash is king because it provides financial flexibility and security. In times of economic downturn, many businesses and individuals face financial challenges, such as layoffs, decreased revenue, and market volatility. Having a reliable source of income becomes of the utmost importance. While stocks can offer the potential for capital appreciation, they don't typically provide regular income. One way to turn equities into income is by investing in rental properties. Rental properties can provide a steady stream of monthly income, helping to offset any losses in other investments during a market downturn. By diversifying your portfolio with rental properties, you can potentially earn higher returns and increase your overall income. Additionally, rental properties can offer long-term benefits such as tax deductions and appreciation over time, making them a smart investment choice for those looking to build wealth during a recession.

Focus On Capital Preservation

It's important to focus on capital preservation and protect your assets from market volatility during a recession as well. Real estate can offer a more stable investment option as compared to other traditional investments like stocks and bonds. Fun Fact: In the US, rents have never gone down year over year, even during economic downturns (source: John Burns Real Estate Consulting). In addition, the overwhelming majority of years see home prices rise in the US (the lone exception being The Great Recession which was caused by loose lending practices.) Home prices have seen gains in Jacksonville every year outside of The Great Recession since 1982 (source: John Burns Real Estate Consulting). The consistency of real estate is due to its utility, as people will always need a place to live, and it being a tangible asset. This increases the floor of pricing for the asset which leads to stability over decades. By investing in real estate, you can mitigate the risks associated with market volatility and protect your wealth during uncertain times.

Beat Inflation Without Taking Extra Risks

Many investors are hesitant to take risks in the current economic climate and are choosing to keep their money in cash. However, with inflation currently at 4.9% (source: US Bureau of Labor Statistics), that cash is just getting devalued by 4.9% every year, and these investors are effectively losing almost 5% of their investment every year. I don’t know about you, but that isn’t an investment strategy that feeds a long-term goal. Similarly, while bond yields have risen recently due to Federal Reserve rate hikes, they still typically fail to beat inflation. Because of this, there are few investment options available that offer both risk mitigation and a return on investment that beats inflation. But of the few options, there is one we’re partial too: Single-family rental properties in a growing metropolitan area like Jacksonville, FL. By diversifying your portfolio with rental properties, you can potentially earn higher returns than traditional investments while mitigating risk and protecting your assets from market volatility. It’s a win-win-win.

Summary

Investing in rental properties during times of inflation and market volatility can be a smart and effective strategy for beating inflation without taking on unnecessary risks. With cash losing its value due to rising inflation, and traditional investments such as bonds failing to keep pace with inflation, it's crucial to find investment options that offer both stability and higher returns. Investing in single-family rental properties with companies like JWB Real Estate Capital can be a key component to your investment strategy. JWB focuses on growing metropolitan areas like Jacksonville, FL which can provide a reliable monthly income source while offering long-term benefits such as tax deductions and appreciation over time.