blocks that spell out stress less

Plan Ahead to Avoid Financial Issues & Money Anxiety

Financial issues are one of the most common causes of stress. According to the American Psychological Association’s Stress in America survey, stress about money is the highest recorded since 2015, with more than 60% of respondents citing they experience money anxiety. 

Commercial real estate investors are no strangers to financial stress given concerns about returns, rates and expenses related to their investments. Although dealing with financial stress may come with the territory, it can still yield an impact on mental health. If not properly managed, financial problems and related apprehension can lead to chronic anxiety, depression, sleeping problems, physical pain, medical problems and a host of other issues. Luckily, there are impactful strategies investors can employ to manage and curb financial stressors.

Alleviate Money Problems by Forging Relationships with Industry Experts

Commercial real estate investors—whether passive or active—consistently come into contact with industry experts, such as commercial brokers, lenders, agents, property managers, financial planners, money managers and other financial specialists. Work to create meaningful relationships with these financial pros—a relationship that ventures beyond them managing your investments. Schedule time to take them out to coffee or dinner to ask for their financial advice, gain insider knowledge and explore new opportunities. 

By cultivating relationships like this, investors can gain awareness of industry shifts and happenings. Discuss current financial news, trends and reports that could impact holdings. Forging such relationships and tapping into expert knowledge may help alleviate future money problems and mitigate bad investments. 

Avoid Financial Distress by Monitoring Refinance & Lease Rates

Every investor knows rates fluctuate, but typically in times of economic distress, residential and commercial mortgage interest rates fall. 

By monitoring refinance rates, commercial mortgage investors can pinpoint times to refinance properties at a lower rate and save thousands over the tenure of a loan. Equally, when mortgage rates are low, it’s a good time to work with agents and brokers to source new investments that offer a greater ROI. 

In addition to monitoring refinance rates, investors can avoid financial limitations by tracking lease rates. Rent increases are regulated by federal and state governments. Commercial investors who stay up to date on the latest increase in percentage cap can regularly increase lease agreement amounts accordingly. 

Explore Passive Income Opportunities 

Diversifying an investment portfolio with passive income investments can be another way to avoid anxiety, as such commercial real estate investments are not time-consuming or as large a commitment as active investments. A passive commercial real estate investor does not personally maintain the property or manage staff. However, investors must decide which is more important to them and their portfolio: spending less time managing a passive income property or receiving greater returns and tax benefits with an active investment.   

Track Costs to Relieve Money Anxiety

A significant and crucial way to ease money anxiety is knowing exactly where the money is going and how that translates into a sound investment. What is the monthly ROI? What are the utility costs, and should they be re-evaluated? Are there large construction and renovation costs to be incurred in the near future? 

It’s important to regularly audit current costs and expenditures to determine what to regulate and where to cut. 

How AVANA CUSO can Help Ease Financial Stress

AVANA CUSO has vast experience in commercial real estate lending—and in every economic climate. Our loan experts work with brokers and credit unions to custom loan structures. Let’s work together to develop a tailored loan that fits investment needs and eases anxiety about growing portfolios.