The outbreak of the coronavirus (COVID-19) epidemic has caused a considerable downturn in the housing market and worldwide economies. Noticeably, the renter’s market has faced a huge decline.
In 2020, the Centers for Disease Control (CDC) issued a temporary moratorium to cease all evictions from rental properties. Prospective landlords may be wondering if investing in a rental property is worth it.
The reality is that COVID-19 may have slowed down the renter’s market, but the need for temporary housing is still present. If you want to make a sound investment, you’ll need to adapt to the changing times.
If you are convinced that making a real estate investment is the right move, here is some helpful information to consider.
Prioritize Long-Term Rental Investments
Airbnb’s and VRBOs are short-term rental properties that have taken a turn for the worse since the onset of the COVID-19 pandemic.
It doesn’t matter if these properties are located in quiet or beautiful locations, federal and state mandates have discouraged the public from unnecessary travel.
Although stay-at-home orders have diminished in several states across the United States, many people are not yet comfortable to begin vacationing.
Despite the ongoing battle with COVID-19, people still need a place to stay. Those who are relocating because of financial problems or downsizing will need a temporary place to live.
The Importance of Location Hasn’t Increased
Vacation and suburban properties have traditionally become a popular investment option for landlords. Due to the federal and state social distancing requirements, it may not be a wise idea to invest in condos for the time being.
Tight living spaces may not be ideal for most people who are still living and working at home. In fact, many people may be working remotely for years to come.
Therefore, the allure of working downtown and in the city will no longer be a feature if COVID-19 restrictions are still intact. Wherever you do decide to invest, you’ll be able to build equity in the meantime.
Location is a fundamental aspect of real estate investing. Although fewer people are interested in living in tight spaces, the importance of location doesn’t figure to change anytime soon.
Local Vacation Properties Are a Smart Option
Airbnb’s and VRBOs may have taken a hit due to people wanting to be close to home. However, investing in local vacation properties may be a great idea.
Travel restrictions are going to be the harsh reality for quite some time. This may cause people to use the money for vacations abroad and invest it in local vacation properties.
If you have been considering purchasing a local vacation home for the past few years, now is the perfect opportunity. If you wait too long, prices for these properties can soar.
Don’t Get Too Optimistic
Now is a great time to invest in real estate property. Still, it’s important to never get overly optimistic during this year’s pandemic. If you’re planning to invest, acquire a single property at a time.
It’s also important to make sure that you have enough cash flow to continue investing in other properties. The home improvement process can take longer than it usually did.
Due to COVID-19, home renovation projects have increased. This means that contractors could be hard to come by if you don’t already have your own team.
A shortage of available contractors can lengthen home improvement project timelines, so acquiring multiple properties at the same time isn’t wise.
Before investing, here are some steps to follow to make sure you’re avoiding a costly mistake:
- Analyze your available cash flow and resources.
- If you outsource, make sure that there are available contractors to accommodate the size of your project.
- Determine the time frame to renovate before investing.
Talk to Reliable Experts
Unfortunately, landlords don’t have all the answers. COVID-19 has created a unique atmosphere where nothing makes sense anymore, especially real estate.
No matter how much research you conduct, it’s always best to talk to a proven expert to gain valuable insight into the real estate market.
For example, if you have the bandwidth but lack the cash flow to invest, you can consider taking out a rental loan. Speaking to a rental loan specialist will provide you with a cost-benefit analysis on growing your portfolio while minimizing hiccups down the road.
Always Think Long-Term
Anyone that invests in real estate should be mindful that the market isn’t a get-rich-quick scheme. The nature of the COVID-19 pandemic is troubling for short-term investors who sell properties.
However, long-term investors are in an ideal position. As society and the economy rebounds from the pandemic, you can benefit from the decisions you make right now.
Don’t be discouraged by the current state of the COVID-19 pandemic, sell your properties, and cut your losses. Therefore, remember to safely weather the storm and play the long game.
Understand Eviction Laws
Landlords naturally dread the eviction process because it’s both time-consuming and expensive if the matter goes to court. Nowadays, it may even be illegal to evict a tenant.
Different states have enforced eviction moratoriums, meaning that it’s unlawful to evict a tenant until a certain date. Depending on where you live, you should consult your state’s laws to make sure you’re in compliance.
Buy a New Rental Property Today
The real estate market, in the COVID-19 era, is currently volatile. Due to the economic hardship of the pandemic, most landlords may not have the capital to expand their business.
This is where we come in. LendSimpli offers reasonable rental loans for rental property investors that are experiencing a shortage in cash flow.
Start the loan process today to learn more about our competitive rates and lending experience.