POMARA┼âCZOWA WOLNO┼Ü─ć FINANSOWA

Najnowsza ksi─ů┼╝ka autorstwa S┼éawka Muturi, Janka Dzieko┼äskiego oraz Artura Ka┼║mierczaka. Powsta┼éa ona z okazji 10 rocznicy dzia┼éania bloga Fridomia. Ca┼éo┼Ť─ç dochod├│w ze sprzeda┼╝y ksi─ů┼╝ki zostanie przekazana na cele statutowe Fundacji Fridomia.

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Buying residential rental properties is like investing in… swimwear­čśť

With a global outbreak of the Covid-19 pandemia, we are all deeply worried.

Worried about our own health and that of our families and friends and even strangers in our neighbourhoods. Worried about the capacities of our hospitals, our national health systems and our politicians to cope with the outbreak.

We are also worried about its economic impact. Will our companies survive a prolonged period with zero sales? Will our jobs, our paychecks survive a prolonged shutdown of our normal daily activities? Will our savings (assuming people have any) last long enough?

Intuitively, this is not the right time to worry about investing for the future. There are so many uncertainties facing us at the moment…

I agree, at least to some extent.

If your savings account is showing a figure of PLN 50 to 100,000 (approx 12 to 25,000 USD) then perhaps this is not the right time to start investing. Keep all your cash reserves to carry you through what might be choppy waters ahead.

If your account is showing a balance much higher than a few months worth of spending, then you might be interested in looking around for some good opportunities, assets being fire-sold because their owner had previously overstretched himself, etc

Whatever the amount of cash on your hands now, and perhaps even more so, if your account is showing just a single zero, this might be THE BEST time to give some thought to your financial future.

Why now? Because our lives have slowed down. Because we have more time now for thinking. Because it has gone more quiet, especially in the media now seemingly all focused on just one single topic. Today your investment advisers are less busy and they will have more time to patiently explain to you all of the details, answer all your querries. Today you will not be pressured to make a quick decision and move swiftly to the next task on your busy to-do list.

It was Warren Buffet, I think, who once famously said that when the level of water starts falling in the swimming pool, we will quickly see who was swimming… naked. It might soon become apparent to more of us why investing in short-term rental is a lot more risky than in long-term rentals. Or why flipping is more similar to trading cars or buying and selling agricultural produce or any other commodity than it is to investing. I’ve been having many heated debates over this for a few years now. Today is a good time to verify who was swimming… dressed.

So please take some time to look around, to talk to the various investment advisers and to ask them how they are doing and how their investments are doing. How robust they are in times of a major slowdown and even greater economic uncertainty.

I hope many of you will see for yourselves that investing in long term residential real estate is like buying yourself… swimwear. So that you are ready for the outbreak of covid23 in 3 or covid25 in 5 years’ time or whenever the next virus or other calamity chooses to strike us all again.

Buying swimwear might not be very glamorous, especially compared to buying jewelry or a fashionable gadget. But it will give you a lot of peace of mind. I for one, have today absolutely no financial worries no matter how long the virus chooses to last. It is one less thing for me to worry about. And I wish all of you the same. In times like this we realize that simple things like facemasks, toilet paper or swimwear might actually be more valuable than the fancy stuff­čśŐ

If you would like to know more about how our company Mzuri can help you buy “swimwear” in Poland, feel free to call my son, Oskar on +48 570 321 266 or send him an e-mail oskar.muturi@mzuri.pl

For those of you who understand Polish, here is a link to a 40 min webinar yesterday during which Oskar’s boss, Janek explained how you can get started on investing in “swimwear” https://youtu.be/2MW_L_xKNZM

Be safe and remain healthy. Use this slowdown as usefully as you can. All the very best to you all.

Je┼╝eli chcesz podzieli─ç si─Ö z innymi, udost─Öpnij:

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2 Responses

  1. Hello Slawek,
    Obviously the world is now significantly different place than few months ago. Looks that a massive worldwide recession with mass unemployment is just around the corner. Soon a lot of people could be forced to swim naked and choose between paying their rent or buying food supplies. It wonÔÇÖt take people long to decide what is more important, and there is a relatively small chance that government would step in to help landlords with their losses – they will be at the bottom on the list of priorities – or even worse can be treated as a milk cow in the current situation. Many people may be forced to sell their homes and investments to keep their businesses alive, many could have problems with paying mortgages, many short-term let properties could change to long-term let, however IÔÇÖm not thinking about it for my properties at the moment – they will most likely stay empty for next few months and I expect less competition later on in the short-term let market, so overall the next few months doesnÔÇÖt look very optimistic for everyone.

    Of course there are opportunities as well, especially in a stock market as some great companies have been heavily discounted. IÔÇÖve decided to invest in stocks instead, as in my opinion investing in properties in next few months is a very risky thing to do, it is hard to predict what next few months will bring for the property market, but if we avoid a huge crash we should probably think about it as a miracle.

    1. BiL, I agree there is a lot of uncertainty going forward. Some sectors are obviously more vulnerable than others. Even within the different segments of real estate investing.

      Speculation or trading in real estate is more vulnerable than rental. Commercial real estate rental is more vulnerable than residential. I see short-term residential rental as being a lot more vulnerable than long-term. Group investing in residential long-term rental less vulnerable than investing individually (risks are more spread out over a larger portfolio of properties and thus income less volatile).

      Overall, the way I see it, is that whereas investing in rental properties generally constitutes a purchase of good swimwear, investing into crowdfunding residential long-term rental platforms (such as Mzuri CFI Portfel Mieszka┼ä) buys you swimwear with the tightest elastic rubber bands. Holding your swim trunks in place­čśť

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