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Real Estate Investing Tips During Coronavirus

Over the years, real estate investing has become a popular option to strengthen investment portfolios and to create a passive flow of income. While this aspect of investing is constantly changing, major changes have recently taken place as a result of the Coronavirus. With many areas entering stay at home orders with fewer people venturing out and concerns over the virus in general, many types of businesses have slowed down. As you approach your real estate investing during the aftermath of this pandemic, there are certain tips you need to follow to ensure your investments continue to provide the return you’re looking for.

Don’t Give Up

Although it may feel as if the world has stopped entirely, it’s important not to give up on your real estate investing ventures. In fact, now is a great time to keep going because prices and interest rates will be lower and you’ll be more likely to get the properties you’re interested in. However, this doesn’t mean you shouldn’t make any changes to how you do things. It’s critical to remain flexible, learn how to obtain secure funding and continue to network, even if it’s online.

Increase Your Marketing

Even if it feels as if no one is buying or selling, the truth is a lot of people are in need of money right now. This means they’re more likely to let go of properties they don’t really need or they were holding onto for sentimental reasons for the sake of making money to live. Increasing your marketing efforts will help you reach these people and find properties for sale you might not otherwise encounter.

Buy for Less

Don’t be afraid to offer less than the asking price when you do buy property. Sellers are understanding people will be less willing to pay more for property at this time so they expect to receive these lower offers. However, keep in mind there’s a chance property values may continue to drop for a period of time, so you’ll need to be prepared to absorb that drop or wait until prices rise again before selling.

Complete Virtual Transactions

More companies are going to contactless interactions where they meet through video conferencing and telephone calls, rather than in person. It’s easy to look for properties online or list them for sale online. While people will want to see a property before they buy it, for the most part, you can complete most of the steps involved in buying and selling can be done virtually.

Prepare for Long Periods on the Market

You may be used to buying a property, flipping it and selling it for a profit in a relatively short period of time. However, this isn’t necessarily going to happen at this point in time. For many investors, buying properties you intend to rent out may be more lucrative for the time being. However, if you do choose to purchase a property you intend to sell, be prepared for it to spend a longer amount of time on the market before it sells. Higher priced properties will sell slower than lower priced properties.

Expect More Stringent Lending Requirements

Lenders are also tightening their belts. If the last housing market crash taught them anything, it was to be careful about lending money to individuals who are in a rough financial situation. They aren’t interested in falling victim to this problem again. Therefore, they have made it more difficult to qualify for loans, which can have an impact on your ability to purchase properties.

Mistakes To Avoid As A First Time Investment Property Owner

So you’ve decided to start thinking about the future and finally take the leap into property investment. Congratulations! Being a property owner can be incredibly rewarding both personally and financially, but only if you make the right moves. Fortunately, many people have been where you are now, and you can learn from their mistakes to ensure you get the most out of your investment property endeavor. So with that in mind, here are the top mistakes made by first time investment property owners that you should do your best to avoid:

1. Not Treating it As a Business

Make no mistake; investing in property ownership is a business. You therefore need to keep emotions out of your decisions and make smart, analytical moves. This should go without saying throughout the process, from deciding which property to purchase in the first place to filling it with tenants and maintaining it. On that note, it is also a good idea to consider enlisting the help of an experienced property management company.

2. Relying on Appreciation Alone

A lot of people tend to buy property with the expectation that, with time, the property value will go up and they’ll get a big payoff in the end. While property values do tend to increase with time, the truth is that the monetary difference is often not nearly as much as people expect. Additionally, outside, uncontrollable factors like the fluctuating economy and occurrences in the surrounding local community play a huge role in property value. So when you purchase property, you need to not only make sure that there are unique aspects about it contributing to its value but that you are also willing to put in additional work to make sure that happens.

3. Not Doing Enough Research

Many first time investment property owners also unfortunately do not perform adequate research before making the decision to purchase. But just because a place looks good on the surface does not mean it’s automatically a smart investment. It’s important that you do your research into things like the building history and any structural damage / repairs, the surrounding community and any potential crime / economical issues, etc. Doing so will also help prevent you from overpaying on a property.

4. Not Properly Assessing Your Financial Situation

It may seem like a no-brainer, but a lot of people still underestimate the importance of making sure all their finances are in order prior to investment. You need to make sure you at least have enough money for a down payment, much less be able to continue making payments. Even if you can afford the property outright, you need to make sure you have the funds for things like property taxes, repairs and renovations.