The Coronavirus pandemic of 2020 has made an impact on every industry, including the real estate industry. Prior to the pandemic, the economy in the United States was soaring. Many Americans had big plans for 2020 and beyond. Some of those plans included investing in real estate. But because of the impact of the pandemic, many people are left wondering if investing in real estate is still a wise decision.
The stock market is crashing, but what about the real estate market? Will it crash with it? We’re here to tell you right now might be the best time to invest in real estate. Here’s why:
If you are not economically affected by the pandemic, it’s a great time to invest in some property. When everyone is in a good economic state, the real estate market becomes competitive because many people can afford the property.
While the coronavirus has significantly impacted many people, it has given real estate investors a competitive advantage. Now’s the time to hunt for those 5-star properties that were hard to get before.
Has the real estate market slowed down for a while? Yes. But it doesn’t change the fact that people still have to move. Some people are expecting to grow their family in the near future and need a larger home; others will have to move for work purposes, etc. While it might feel like it with everyone at home, life has not been put on pause. There are still buyers out there. And for those buyers who are ready to buy a home, now is the best time to get a loan. Interest rates have hit an all-time low within the past month. Some rates are as low as 3.25%
With the rates and prices as low as they are, it’s safe to say we are in a buyer’s market. In a buyer’s market, negotiating is a lot easier.
Unfortunately, some people will have no choice but to sell their property because they cannot afford it anymore. Some people may have lost their jobs, and they can no longer afford their homes. In many cases, sellers will be more motivated now than ever to sell their homes.
The Tips and Tricks to Success in Real Estate Investing During COVID-19
The trick to being successful during a pandemic is to invest in areas with a strong real estate market. So, how do you find strong real estate markets? Here are a few of the best ways:
Research the markets
A good real estate market should have an area with job growth, population growth, and affordability. Now, during this pandemic, the job market has slowed down quite a bit. But it won’t stay this way forever.
When considering the job market, its best to consider what the job market might look like down the road. While the job market might have slowed down in this area, what will it look like in a year from now? Five years? These areas should also have a diverse job market. There should be jobs in the finance industry, tech industry, higher education, and so on. As long as the area will have a comeback, its safe to consider it as a good real estate market.
Avoid Areas That Have Been Significantly Impacted
The areas that had a weak economic foundation prior to the pandemic are less likely to make it through the pandemic and recover successfully.
The biggest cities in America, such as New York, Chicago, and Los Angeles, are getting hit hard, and they are identified as “hot spots,” but typically, these areas have the strongest economies with great job markets. Those big cities also happen to be the most expensive, so it is challenging for many people to afford real estate in the area.
Metropolitan areas that are both affordable and have strong, diverse economies might go through a bit of a hurdle, but they will more than likely recover. The key is to avoid areas that have been strongly impacted and will take some time to recover.
Go Where the Jobs Were and Will Return To
Prior to COVID-19, many areas were showing steady growth in the job market. It is likely that the growth will continue once all of this passes. For instance, Amazon was hiring tons of new employees and now that E-commerce is booming, this is even more so true today. As you can imagine, the healthcare industry is growing as well as tech industries that support remote work.
Plenty of large corporations have furloughed their staff, meaning many jobs are on hold. Disney, for example, has furloughed thousands of employees, but once the attraction opens back up, people will return back to work. New York City, for instance, has tons of service workers that have either been laid off or furloughed because restaurants have been closed. However, New York City also remains one of the biggest tourist attractions and is widely known for its restaurant industry, meaning they will overcome the pandemic.
Businesses will begin to open up again, and the economy will make a comeback. Real estate investors can expect to find inventory that was hard to purchase in the past because of the competition, but now is their chance to get into those desirable areas.
Invest for Potential Appreciation Rather Than Cash Flow
Since the stock market began to crash with the rise of COVID-19, some investors pulled their money right away while others looked for ways to lower risk by looking for investments. Buying investment property might be better than ever because of the extremely low-interest rates and less competition since many people won’t be able to afford a new home. Consider the potential appreciation rather than focusing on the cash flow.
Call Motivated Sellers: Finding You Leads Through This Tough Time
So, there you have it! If you’re wondering if it’s a good time to invest in real estate, the answer is YES! If you are looking to take advantage of the low-interest rates and little to no competition, we are here to help with your investment efforts.
Call Motivated Sellers is here to help you find quality leads during this tough time, and so you can bounce back stronger than ever once we get back to normal.
Ready to get started? Give our team a call!