This global pandemic has affected almost all businesses and households worldwide and altered the way of living as well as working for many people all over the world. With the sales in some sectors (like the airline industry) plummeting and others blooming (like pharmaceuticals), in the real estate industry the effects are variable with time.
For tenants everywhere, due to the shutdown of businesses, paying rent became an issue, and developers of new projects ran out of liquidity to continue work. Due to liabilities, lifestyle, and extended closure of businesses, many were forced to sell assets in real estate to keep things flowing comfortably for the household.
As the purchasing power of the common people declined sharply, so did the price of the real estate in many areas, especially where there were more vacant residential units. Freelancers, online workers, and those doing work from home also relocated from expensive places to cheaper localities to avoid spending extra on accommodations. This phenomenon has now created golden opportunities for real estate investors which must be availed in the light of the following tips :
1) Investing in Distressed Assets
This pandemic has created vacancy and rent collection issues for real estate owners who had invested in expensive multi-family properties. Many landlords are experiencing a huge financial crunch and are willing to let go of their properties for much lower prices to improve their cash flow. Now is the time to invest in such distressed real estate assets and acquire them for a good price.
2) Prop-tech Revolution
Nowadays 'stay home' directives are implemented everywhere and most people are trying to avoid leaving their houses to physically canvas the properties for sale. This has resulted in a surging demand for online work. Staying inside their homes, using technology, buyers can attend virtual open houses and see each corner of a property. Investing in companies that are technically strong and have the right tools to meet this increasing demand can be very beneficial.
3) Cash is the Boss Nowadays
With the decreased purchase power and cash-flow issues for a big part of the population, if you have the cash right now, you are the boss. Offering all-cash deals to the sellers can result in drastically better offers for you as a real estate investor in these times.
4) Beware of Scams
With every financial recession, scammers and frauds become extra active to take benefit of the vulnerable fresh investors. Therefore, it is of paramount importance to beware of such hacks. The best way to do that is to stay in touch with experienced and reliable real estate professionals and run every opportunity by them before making a final decision.
The lesson to learn from this market crash due to the pandemic, like other dips, is to never keep all eggs in one basket. Try to diversify your portfolio as a real estate investor by dividing your investments into different parts of the industry.
COVID has undoubtedly jolted the very foundations of many small real estate investors but at the same time, it has also presented opportunities that are profitable like never before. If you have the right resources at your disposal and a winning mindset, you can get on top of things in this industry with the right guidance.