As cities all over the world continue to see an increase in COVID-19 cases, many have taken to going on a second lockdown. But this has done little to deter people in carrying on with business. The first lockdown had given organizations the time to develop new processes and strategies to adapt to the new normal. As such, several companies continue to conduct transactions online, including the real estate industry.
Real Estate in the Time of a Pandemic
The property market is one of the few that has remained resilient since the early days of the outbreak. Many individuals continued to invest in the real estate industry, causing it to rise ahead of stocks and bonds in the market. Experts were quick to explain that this is typical in times of crisis. Excluding the 2008 Global Financial Crisis, which started in the property market, individuals and organizations see house and land packages as resilient and practical investment choices for their portfolios.
Should You Invest in Real Estate?
Before making any significant financial investment, consider its feasibility in your short and long-term financial situation. Experts advise first-time investors to set aside at least three months’ worth of their salary for emergencies. But with the current situation, they have raised this to six months to offset any unpredictable situations. This emergency fund should be separate from the money you will use for real estate investments. Additionally, a separate fund is necessary to pay for the legal and transactional costs typical of this type of investment.
What Should You Invest In?
Recently, Melbourne properties saw a 2.3 percent drop in value. However, experts argue that this is mainly caused by typical market drivers, with the ongoing pandemic as a secondary factor in the equation. Real estate continues to be key consumption items for individuals and organizations.
Buying Residential Real Estate
Purchasing a newly built or previously owned home is still considered as one of the most prudent investments for individuals. With prices lower than usual, more people have the opportunity to purchase a home for their investment portfolio. Realtors have taken to providing potential buyers photos and videos of the entire property to give them better insight into its current condition. Although this unusual, everyone is adapting to the changes to carry on with transactions. However, the real challenge now is the potential supply shortage as construction projects remain at a standstill.
Buying Commercial Real Estate
Unlike residential properties, experts are hesitant to suggest commercial properties to investors. With some cities going back under lockdown, commercial spaces will once again close. This makes them an impractical investment if you are looking for short-term results. However, individuals and organizations that choose to look at long-term investment potential will see the benefit of the addition of a commercial property to their portfolio. Once the cure has been found and distributed, an economic reopening is expected.
Starting or expanding your investment portfolio now is not a bad idea. Global markets continue to adapt and recalibrate to the situation. If you’ve confirmed the feasibility of this endeavor, consider going through with it to give yourself a long-term financial cushion.