The current pandemic and economic recessions made everyone insecure about investing. The coronavirus pandemic caused an economic upheaval that dramatically reshaped global markets and commerce. Companies have adapted to remote work or reduced their workforce, affecting individual finances and financial plans. This is so different from other financial crises in the past as it is not a financial crisis but a public health crisis, which is a unique set of circumstances.
But with the confusing and volatile market we have today, does it mean we have to stop saving or investing? Remember that in order to have more emergency funds, we have to save more and invest more. As this pandemic seems to stay longer than we expected, investing is the only way to secure our future and make it better and more stable. One of the most provident financial investments one can make is buying real estate property. But during this pandemic and economic trouble, is it still wise to invest in the real estate industry? What real estate investment is good and best amidst this extraordinary period?
It has proven by financial experts that in most historic recessions, the property market has either remained largely resilient or was only impacted across certain real estate sectors. It means that now remains a reasonable time to think about buying a real estate property.
With cities and states slowly reopening to stimulate global economies, interest rates were slashed. The cost of borrowing has become cheaper which means more affordable mortgages for those with adequate finances. But despite the fact that most if not all will offer lower mortgages, it is still safe to have an assessment first of how much you can afford to borrow.
Experts in the field believe that transactions will start rising again in a sluggish way, in the coming weeks; but as the nature of the coronavirus pandemic remains uncertain one should look into the specifics of the local and national market of the city in which you’re looking to invest.
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One of the best sources of passive income via rental payments and capital growth is a buy-to-let property. A buy-to-let property allows you to be more in control of your investment, and compared with other mediums, it potentially adds a better value to your investment.
Best investment opportunities can be found in places where there is a less-damaged labor market. For those in a position to invest, they have a lot of great opportunities. However, the global economy and the renter’s market are both on the rocks nowadays so be very cautious as some tenants may struggle to make their payments on time.
Commercial real estate poses the biggest risk for investors as its market has fallen by almost 28% because of the pandemic. It will take some time to correct the drop-off and the recovery for sure would be very gradual due to the phased reopening of economies.
Note that, wherever and whenever there are downsides; there are also opportunities because of the investors who look at the long-term potential of these real estate sectors with strong fundamentals, such as industrial and residential real estate.
It’s important to get the foundations right before embarking on any financial investment like real estate. It is recommended to set aside three months’ salary in cash to help you through a difficult period or emergency, but in the current economic situation where the whole world is affected, six months’ worth is a safer bet. You need an emergency fund as it gives you peace of mind knowing you have a barrier against the worst financial disasters.
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