There is a rumor going around in the real estate industry now. The rumor states that as the economy is in doldrums, investors should lose their investments in real estate. This is based on the belief and assumption that there is no demand for real estate right now.
The financial crisis of 2001 saw real estate prices growing by close to 71%, right in the midst of the depression. The period 2007-08 saw similar figures. What I am trying to state is that the opportunity for growth is always there when it comes to real estate.
In this article, we are going to discuss how you should navigate your real estate investments during the pandemic. We also share some tips, as well as discuss some challenges in this regard.
Opportunities for Real Estate Investments during the Pandemic
One interesting that, which took place in the real estate industry because of the pandemic is people looking for homes in the suburbs. In many American and European cities, people are willing to invest and create homes away from busy city squares.
This is an interesting development, which is leading to price hikes in suburbs and distant places surrounding the cities. Families are also putting in savings or engaging with buying properties as they feel that safety is a big concern.
First-time homebuyers are also coming onto the market with the hope that there has been some reduction in prices of real estate. While there is truth to the fact that it has reduced in some places, there is also a demand and hike in other places.
Challenges for the Real Estate Industry during the Pandemic
According to Connected Investors review, one of the major challenges is that prospective buyers are unable to see properties in person. This is because social distancing norms and the fear of contracting the virus are great. This is one reason why many investments have stalled midway.
If you want to put down a quarter of a million pounds into a house, you would want to see it at least ten times before you make the decision. You also need to consider refurbishing, fixing structural issues and clearing out other things.
However, the COVID-19 pandemic means that you will not be able to do any of the following as it involves meeting and communicating with so many people.
Another major challenge for the real estate industry concerns investments in commercial properties. The ‘Work From Home’ culture has shown many companies that they can manage efficiently from home. This helps in reducing a major chunk of the costs and allows employees to spend more time at home.
The commercial real estate sector has definitely taken a hit. More so than residential real estate. Experts suggest it is best to withhold any future investments into commercial real estate.
How to adjust to the changing Real Estate scenario during the Pandemic?
Technology and Virtual Reality are emerging as major advancements in the real estate industry. Using social media, especially YouTube to offer detailed property information is something, the best investors and realtors are engaging with during the pandemic.
Every major crisis presents certain opportunities and it is important to tap that. By being informed and aware of the changes around you, the real estate industry will continue to be profitable in the near future.
Can you think of some other real estate tips, which can help us maintain our investments in this sector? Drop your answers in the comments section below.