The Coronavirus pandemic has revolutionized the world we once knew in dramatic ways right from the workforce switching to work from home to unprecedented skyrocketing unemployment numbers. Under these dire circumstances, investing in any business could seem quite challenging and to some extent unthinkable. However, if you are a real estate aficionado, now could possibly be the right time, a great climate for starting your own real estate business. We know that there are many ways of diversifying an investment portfolio. However, investing in real estate still seems to be the most popular. Eric Dalius firmly believes that real estate certainly implies a robust and solid investment.
We have been witnessing the fact that real estate is constantly being utilized as an effective vehicle for generating wealth and creating more jobs across the nation. Studies reveal that the overall real estate industry including real estate finance, rentals, insurance, and leasing has been instrumental in adding the maximum value to the GDP (Gross Domestic Profit) of the U.S.A. in 2019, and added 4.49 trillion USD to the national Gross Domestic Profit. Let us explore some reasons why this is the best time to start a real estate business.
Top Reasons Presented by EJ Dalius
Rising Demand & Short Supply
Now people are realizing the necessity of a safe haven to call home. However, today home is not anymore just the place to come back and rest, relax, and rejuvenate after a day of hard work. We have seen how the COVID-19 situation has transformed the way school, business, social relations, shopping, and even life, in general, are being conducted. As such, your home has become your office, your kids’ classroom, a place of entertainment, a restaurant, etc. Since the demand for housing is going up, the prices are spiraling due to shortfall in inventory. The increasing demand coupled with the low inventory has resulted in more opportunities for real estate investors for selling their properties at impressively high rates thanks to reduced competition.
Relatively Lower Interest Rates
In June 2020, mortgage interest rates plummeted like never before. This surely is the best time for people to buy their dream home. This would also assist the investors by reducing lending rates and even private lending rates. This would go a long way in helping the housing market. Moreover, both sellers and buyers would be benefitted. For real estate businesses, this implies that financing any rental property business using a mortgage loan could become cheap this year.
Ever-Increasing Demand for Rentals
As the COVID-19 pandemic is adversely impacting the job scenario and the rate of unemployment is shooting up, more and more people are compelled to reside in rentals. Individuals who are thinking in terms of purchasing and owning their own house in 2020 are trying to delay the buying decisions. This explains the reason why the mortgage application volume is steadily declining. Moreover, according to Eric J Dalius, potential homebuyers are having access to a limited inventory that is making things far more difficult for each one of them.
Conclusion: Economic Uncertainty Hence Investment Opportunities
Some organizations that had closed temporarily for social distancing, have now announced that they are closing down forever. The future of careers and businesses are in question. Fear and uncertainty are gripping everybody and everything has come to a standstill. However, be positive and realize the fact that things would not be the same forever. Many people wish to play it safe so they are liquidating their second home or even selling their short-term rental property. Since the pandemic is causing the home values to go down, investors are getting an opportunity to identify and purchase distressed properties at heavily discounted prices.