There’s likely no industry on the planet that wasn’t impacted in some way by the onset of the coronavirus pandemic. Take the real estate market, for instance. The many fluctuations over the past year have caused concern for investors. Landlords will have a hard time finding qualified and financially responsible tenants. On the other hand, investors that prefer to flip properties will likely pay more money upfront in the now seller’s market.
Whether you’re new to real estate investing or you’ve been in business for a while, you’re probably confused about your next move. Is it wise to invest in properties right now? If so, how can you do so without encountering too many risks? Below is a bit of advice on how to navigate the murky waters of real estate investing as the world moves towards post-pandemic times.
Foreclosures
Unfortunately, the global health crisis led to millions of people losing their jobs (or working with reduced incomes). Survival for some people meant defaulting on their mortgages. Although many states have moratoriums in place, it won’t be long before foreclosure proceedings persist and people find themselves displaced.
As a real estate investor, making an offer to a homeowner going through the foreclosure process could be ideal. Essentially, you’d both be assisting each other. You’d be taking a financial burden off their plates and they’d be willing to sell the property at a lower rate (as long as it covered their out-of-pocket expenses). Another bonus to consider is if you want to be a landlord, you already have tenants living on the property. You can make an offer for a lease agreement with the homeowners and save yourself time and money.
Section 8 Approved Properties
Is one of your properties sitting vacant until you can find a suitable tenant? Perhaps getting the house or apartment approved for section 8 through your local Public Housing Authority would resolve the issue. As many people will be looking for housing assistance post-pandemic, you can rest assured you won’t have trouble finding a tenant. The best part is that a large percentage of the rent is paid by the federal government, so you won’t have to worry about late payments.
While getting your house approved for section 8 may be ideal, you must consider all sides. For starters, you’ll have to have the property inspected by a local professional and comply with HUD’s housing guidelines to get approved. If there are any repairs or renovations that need to be done, you’ll need to invest more money before you can start accepting applications. You can turn to things like this HomeAdvisor review to find qualified and affordable contractors that can help you get your property up to par.
Other Housing Arrangements
As a real estate investor, you have more options than you realize to turn a profit on your properties. One example is going into the vacation rental sector. If you have (or are interested) a residence in a popular travel destination, you could earn money by renting it out to tourists. Although it’s not as stable as rental income or real estate sales, it’s an extra few hundred or thousand dollars you can use to cover your everyday expenses.
Another arrangement to consider is student housing. Higher education facilities and students are always looking for affordable places to rent. If your real estate investment is near a university or college, contact the admissions office to find out about student housing agreements. They may be willing to work out a deal with you that ensures students have a safe place to stay near the campus. Advertising your place for rent in places where college-aged adults tend to frequent is another way to get a variable tenant.
The past year has certainly created some challenges for real estate investors. Investing in a property post-pandemic has heightened risks, namely the amount of time the residence will stay on the market. Without interested homebuyers or reliable renters, investors have no reliable income source to maintain overhead expenses. Fortunately, there are practical solutions like those listed above that can reduce the risks.
