by: Pash Brar
I have spoken to many frustrated drivers and a lot of young people saying they can’t afford to buy anything. Truckers can’t get a truck or trailer due to long waits, high demand and high prices. The young people say they will never be able to afford a home or car and maybe want to move where it’s cheaper housing. When interest rates are up, that’s the time some people can no longer afford what they have. When that happens, there may be opportunities to help someone out of a financial jam and find yourself in a great position.
With inflation so high and increased interest rates affordability has gone down significantly. Those who live pay cheque to pay cheque are now facing increases they cannot afford to pay. From gas to food, to variable rate mortgages, costs have gone up. If you have a variable rate mortgage, I suggest you lock it in now for a long term like 5 years. Locking it will hold your payment steady. If you do not lock it in, you might end up paying more and more. I know some whose payments have risen $800/m already. If the rate is not locked in, you could end up paying a lot more in the future and get to the point where you cannot afford to make the payment. So act now, not later or you might lose your home.
What do you do when you cannot afford a mortgage payment? My suggestion is to sell the property or transfer the mortgage to see if someone can assume it. This opens an opportunity for those who may not have qualified for the mortgage or been able to afford it in the past, to have access to home ownership. Assuming a mortgage allows the buyer to take over the mortgage and bail the original owner out of a bad situation. If the mortgage continues with the original owner and they cannot afford it, they can lose it due to foreclosure. So, this creates the opportunity for someone who may have thought home ownership was out of reach to take over the payments and a way out for the original owner.
A few months ago, in BC where I am from, there were very little opportunities to buy properties due to lack of inventory. But now there is an abundance of property. A few months ago, there were bidding frenzies which drove prices up. Now that the market has settled and interest rates are higher, the market has been flooded with properties. The prices are much lower, and the buyer can pick and choose with little threat of bidding. This is an opportunity for those who could not afford to buy before. Now a low bid may be accepted if someone wants out of a property quickly. This is a buyer’s market. Someone who can no longer afford their home, may be able to accommodate a low price just to keep their credit intact.
With trucking, there has been a significant decrease in business throughout North America. Trucking loads are hard to find, and many are struggling. Many newer companies are closing due to lack of long-term contracts and relationships that need to be developed over many years. For someone wanting to open their own firm, they may be able to buy a struggling firm for cheap. Everything is set up and all the leg work is done, so buying an existing trucking company for cheap, may be a good opportunity for those wanting to start a company.
With equipment, trucks and trailers are backed up; some for years. But with trucking firms closing and lack of loads, some may decline picking up equipment that was on order. Generally, you will not get a below cost deal; you will pay market value from the dealership. But the ability to buy now when there is a several years wait, is a great opportunity. Paying years of rent versus buying now will save many thousands of dollars. So, I recommend establishing a good relationship now with your local dealerships and check frequently for any cancelled orders. Take advantage of the cancelled orders.
Many believe that when the economy is in a downturn, there are no chances for gain. I beg to differ. An economic downturn is full of opportunities for those who recognise and seek them out. While others are in a downturn, that is your queue to bail them out, and get yourself an opportunity that may otherwise have not been available to you. Don’t see a recession as a bad thing, think of it as a money-making opportunity.