Should You Invest in Real Estate Post Coronavirus?

We’ve been talking about it from the early days of COVID-19…

It was the driving catalyst for our building Real Estate Investor Beacon, a 100% Free Facebook Community for real estate entrepreneurs looking for guidance through this time.

It’s why we started hosting our free monthly in-depth coaching events, as well as our free weekly strategy sessions where the REI Beacon community can ask all of their questions in a live open format. 

And it’s why we’re committed to being beacons of light in our industry and our communities. With a common goal of spreading a message of hope and positivity, redirecting our focus towards what is ahead of us…

Opportunity.

Why is NOW the time to invest in real estate?

We’ve discussed strategic business moves you can make while at home, how to find motivated sellers, as well as why this is the time to invest in vacation rental properties, short sales, and probate real estate.  

In this article, we’ll discuss four reasons you should consider investing in real estate right away.

#1 – Record Low-Interest Rates

Even before the coronavirus outbreak, the US was experiencing low-interest rates, but since the pandemic, rates have dropped to record levels—the lowest recording since Freddie Mac began tracking this data almost fifty years ago!

Because of this, now’s the time to refinance or consider investing in a new property.

By taking advantage of refinancing at a lower rate, you’ll not only save in interest paid long-term, but you can improve your cash flow too. Which will free up some funds to invest in real estate.

Have you ever thought about house flipping?

Not only can you get better rates on your home purchase, your house will also be more affordable to buyers when you sell. There will no doubt be new home buyers on the market looking to take advantage of these historically low rates. Meaning there will be a nice win-win for both of you.

 #2- A Surge in Treasury Bonds

If you haven’t been following the stock market, you may not know that there’s been an increase in treasury bonds. It’s a domino effect, really…

When safety investments increase, like the surge in treasury bond purchases, investors look for other safe investment options such as real estate.

Why is this a positive for real estate investors?

It opens up the door to more wholesale deals.

Now is a good time to work wholesale deals since investors are looking for properties to buy.

Wholesale investment deals can significantly help real estate investors grow and scale their business. In fact, we have a case study on one of our Managed Service Members who grew their business from 2 flips a month to 23 deals in just 7 months after our sales team helped them boost their wholesale deal flow.

It means a boost in private money funding.

But that’s not all. Equity investors are looking for other options for investing their money. Have you considered funding your next real estate investment with private money? It may be a better deal for you than a hard money loan.

We’ve got a podcast with one of our founders, Gary Boomershine, and an expert in private money— Jay Conner, that you can listen to about this subject here.

#3 Building Material Shortages

Because of Covid-19, many industries have seen disruptions in their supply chain, especially if their goods or materials come from China. For the home construction industry, imported building materials can take much longer to get today compared to pre-coronavirus days. This has an impact on their building schedule, lengthening the construction process, and reducing the amount of brand new properties available.

This works in favor of real estate investors who flip houses.

With less inventory of new properties on the market, investors that flip can experience more buyer’s demand in renovated homes. In addition, when there are more buyers than sellers, the opportunity for multiple offers can exist, making it an even better market for investors who are into flipping houses.

And it helps long-term rental investors see fewer vacancies.

Besides that, lower inventory means long-term rental investors will see fewer vacancies in their properties. People need a place to live and if there aren’t many choices, those that are available will fill much faster than when options are plentiful.

How to get the most out of a low inventory housing market?

Before you invest in rental homes, it’s important for you to understand what the standard rental rates are for renters in your area. High priced properties are not in short supply. To the contrary, there’s an abundance of those properties for sale and rent in almost any market.

To take advantage of low inventory in your market, you must concentrate on affordable options you can either flip or rent. No matter what type of market you’re planning to invest in, it always pays to do your homework first.

#4 Vacationing Has Stalled…

It’s not a secret… People are nervous about taking vacations over the summer break. From Covid-19 restrictions, worry about international traveling, and even some states going as far as releasing tourism campaigns encouraging out of state residents not to travel to their more remote resort towns until later, traveling is a bit of an iffy subject these days. 

Cancellations and empty rentals have already impacted existing property owners, and likely will continue to be an issue. Even if things clear up soon, it’s unlikely that tourism will bounce back to where it was pre-corona days… At least for a few years, that is.

This can leave investors feeling panicky if they don’t have sufficient reserves to weather this type of storm. Or if they work on tight margins and require maximum occupancy to survive.

Vacation rental owners might need to sell fast at bargain prices.

Desperate investors could opt to sell fast. And a fast sale could mean a bargain price for you. We have an article that discusses this more in-depth that you can read here.

If you’re looking to invest in vacation real estate for the future when things hopefully bounce back, now may be the time to pick up a property for a great deal. After all, we know the sun will shine again tomorrow and vacationers will eventually return to traveling.

A post-coronavirus world will be different, but opportunity is often found amidst change.

In a post-coronavirus world, there could be plenty of opportunities for you to invest. When our news feeds return to normal, investment opportunities might not be quite as vast as what they are right now amidst uncertainty.

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