Since March 2020, nothing has been business as usual. The Covid-19 pandemic has totally changed the way we all do business, and as the market continues to dip and rise, one thing is for certain: It’s an interesting time to be a real estate investor.
While the uncertainty in the national real estate market might scare off newer, would-be investors, seasoned investors know that these moments of turbulence often lead to unprecedented bargains. Shifts in the market sometimes beget wild opportunity, and where there is greater risk (as the saying goes) there is often greater reward.
But how can you know for sure whether investing in real estate during the coronavirus pandemic is your chance to get a great deal on your next investment property?
The not-so-simple answer is, there’s no way to know for certain. However, depending on your particular circumstances, this shifting market could very well be the golden goose you’ve been waiting for. Investors considering taking on new properties during the current climate would do well to ask themselves a few questions first.
1. What is the state of your local market?
As a real estate investor, you know that no two markets are created exactly the same. In order to decide whether the risk of buying during the pandemic supersedes your potential for profit, you have to be intimately familiar with your local market.
What’s the market in your region been doing since March? Are sales closing quickly? Are rentals sitting stagnant and empty? Are people moving into/away from your area based on economic factors? Research is key to your success here.
2. What’s your strategy?
Strategy is always an important piece of the puzzle in real estate investing, but this is even more true when the market is in flux. Are you looking for a short-term investment, or something more long-term? Do you have the leverage to come out okay even if your plan goes awry?
Residential fix-and-flippers do have the potential to turn great profits right now, but you’ll want to choose properties that you feel great about. This may not be the best time for ambitious, time-intensive projects. Instead, choose single-family homes in desirable locations that require simple, cosmetic work rather than full-on restorations.
Buy-and-hold investors with a more long-term strategy also stand to benefit from the current market—in many cities, rental homes and apartments are in high demand. However, you’ll want to be selective about your tenants. Will your renter still be able to pay his/her rent if we experience another lockdown situation? Will you find yourself in a situation where you’re dependent upon your tenants’ income to cover your own expenses?
Understand the game you’re trying to play, and make logic-based choices rather than emotional ones.
3. Do you have access to the necessary funding?
Being able to pay in cash is always a huge asset, but right now, it’s especially important. Sellers are nervous—they don’t want to sit on their properties waiting for funding to kick in or multiple appraisals to work out. If you can sweep in with a solid cash offer, you’re far more likely to secure a great deal on your property.
If you’re ready to invest and looking for simple, straightforward funding options, we’d love to talk with you. Click here to find out how we can help you take advantage of the current market with a variety of great funding options.