Remember back about eight months ago, when some experts told us that the Coronavirus is going to fade away just like it appeared? Remember how some scholars predicted that the effect of the virus on our life will be marginal? Well, it’s pretty clear by now that they were a bit off. The COVID-19 is apparently here to stay for quite a while, and we’re going to have to live with it. While it seems like only certain aspects of our life have been affected by the virus, that picture can be a bit misleading. Only a few good years from now will we truly understand just how much things have changed because of the pandemic.
One of the fields that it is much too early to assess how COVID-19 has influenced is real estate in general – and real estate investing in particular. For the short term, it seems like business is booming as usual. People are going to need a place to live in, whether there’s a virus out there or not, and people are going to keep creating those living spaces as well. On the long run, however, it is mainly the way governments react to the pandemic’s effect on the country that will determine the future of real estate there.
Say ‘goodbye’ to the global world you used to know
It’s pretty clear by now that globalization has taken a big blow over the last couple of months. The world can’t be one big village when people are simply not able to travel around it. Ofir Eyal Bar, a real estate investor and digital entrepreneur with many successful projects around the globe listed to his name, warns us not to underestimate this fact. “People assume that in today’s reality anything can done online, but when you look at the small details you understand that this is far from true. For example, the shutting of the borders prevents construction workers from migrating from poor countries to rich ones – having a massive effect on the supply side of the equation in the modern world.”
Having said all of that, there are not only risks but also opportunities in today’s reality. Here are a few key dos and don’ts to keep in mind when considering real estate investments.
Do assess the local market you want to invest in. The virus has affected nations differently and therefore their markets did not respond the same. What seems like a blow to one nation’s economy may be a boost to another’s. Talk to local experts, they’ll probably help you understand.
Do be on the lookout for opportunities. Where you see a drop in prices, keep in mind that a rise may follow. A professional analyst will probably be able to make sense of current data so if you can use their help, go ahead.
Do stay updated. The situation changes frequently and what’s relevant now may not be relevant in five minutes. On the other hand, it may also be relevant for the next few months. A good sense of judgement can help you on this one and yes, sometimes you also need to trust your instincts.
Don’t rush. Always double check everything, including the small print. If it’s too good to be true, it probably isn’t true.
Don’t splurge. As Ofir Bar put it, “this is not the time to go all out. Small investments are more ideal for uncertain times in general and the real estate market is no exception here. On the contrary, once things are shaky in this market specifically, the risk is much more substantial.”
Don’t make decisions on your own. Consult with a broker, an expert, an analyst – even your family members. Take time to think these decisions through, even when you are told that this opportunity may fade if you hesitate too long. That is usually untrue and even if it is, another one will come along.
Here’s to a better tomorrow
While this article may have painted quite a gloomy picture, it is important to remember that, as cliché as this sounds, humanity is stronger than this virus. Society will learn to adapt to it and will learn to live with it, and so will the real estate market. Every challenge is also an opportunity, and the wise are the ones to recognize it ahead of time. That’s why it is important to keep looking out there for the deals that seem to have potential on one hand, but remember to keep that pinch of salt around on the other.