Why Now is the perfect time to make a move in Real Estate
The COVID-19 pandemic has had a huge impact on our world - from workers moving to work from home to rising unemployment. In the midst of all this turmoil, the idea of starting your own business now may not have caught your attention. However, for real estate enthusiasts, this can be a good environment to start a real estate business.
From an investment point of view, there is a lot of business to be done right now, especially if you buy with cash. Although the stock market has performed well in recent years, it has been volatile and unpredictable.
“The today’s instability means there is a lot of money today and not tomorrow. While property values will also decline, more factors are at stake. For example, if the housing market fails, there will be more tenants.
Here are four main reasons why this is a good time to invest in real estate.
1. Lower mortgage rates Since the stock market crash in March, the Fed has cut interest rates twice to counter the economic losses caused by the coronavirus. According to the Federal Reserve System, this step will stimulate an increase in the volume of bank loans to households and businesses and the contribution of funds to the financial system.
Many economists believe the government will cut interest rates further by the end of 2020. For real estate investors, this means that the cost of leasing real estate companies through mortgages this year will not be high.
In addition, the number of mortgage applications declined 24% over the previous year, despite low interest rates. According to the Mortgage Bankers Association, this is exactly what many economists expect as consumer confidence in the US housing market will decline in 2020.
This means that if you take out a mortgage to start a real estate business, it will reduce competition. And because banks rely heavily on loans, they now have great incentives to transfer more money for real estate investments.
2. Growth in rental demand As the coronavirus pandemic hits the job market and unemployment is expected to rise, more people will want to rent. Anyone looking to buy a home in 2020 is putting off a buying decision. This also explains why the number of mortgage applications has decreased.
According to Forbes, the share of young people in the US housing market has dropped to around 35%. Experts believe that in the face of stagnating incomes, rising house prices and rising numbers of people living in student debt in big and expensive cities, this trend will continue into the future.
Furthermore, potential buyers have limited real estate assets, which makes them even more difficult. Real estate and housing construction have been inadequate over the past decade. This fact proves once again that the demand for rental properties will increase by 2020.
Furthermore, experts predict that the demand will continue after the coronavirus ends until everything returns to pre-pandemic levels. So now is a good time for those looking to start a real estate business to take advantage of low interest rates and buy several rental properties for little money.
3. New investment opportunities While many people are concerned about the impact of the coronavirus recession on the housing market, experts say these changes are likely to benefit real estate investors. As the pandemic lowers the value of homes, it offers investors an opportunity - you can find and buy distressed properties at a discount! Indeed, distressed properties and foreclosures have hit some real estate markets across the country. If the COVID-19 pandemic lasts long, experts suggest there will be more in the future.
It is also worth remembering that the seller lists their home at the selling price. This means that those who sell homes on the market understand that this is not the best time to bargain. The agent advises the seller to take reasonable precautions to avoid frightening potential buyers. Therefore, depending on your risk appetite, the next few months could be a good time to buy real estate and start a real estate investment business.
Plus, you now have time on your side, so you don't have to rush to find real estate deals. Never forget that the success of a real estate business depends on the number of transactions. Before moving, be sure to analyze your rental property and calculate your ROI. We can help you - find out more about how we can help you make faster and smarter real estate investment decisions.
Now, as an emerging real estate investor, the most important thing to remember is that you have the time and technology. Although people have been worried that the coronavirus will decline, the end of the tunnel is still glowing. During this time, you can spend a few hours to develop a real estate business plan, explore competitive markets, or just improve your understanding of real estate investment. In addition, investment tools like will make it easier to enter real estate in 2020.