The real estate market proved its resilience during the crisis. Home prices surged and buyers are flocking the market. This made more people interested in real estate investing. As demands for properties for sale continue to increase, many found this as a great opportunity to build their wealth and diversify their portfolio. But then, investors face unique challenges brought about by the pandemic.
Not Knowing How or Where to Start
People often have no idea how to start their real estate investment journey. Some people think they can only flip houses or create passive income through rental properties. Others want to play it safe but don’t even know how to do this.
It is true that there are tons of resources that can teach how to start in real estate investing. But then, not many people have the luxury of time to study and devote to investing. Most of those people have the money but not the knowledge or experience to earn through real estate investment.
The good news for newbie investors is that they have the option to be passive investors instead. This works by working with a company specializing in real estate investments. All you have to do is finance or fund a real estate purchase and allow your partner company does all the hard work.
Once you invested your money in your partner company, they will take care of the buying and selling of the property. You get to enjoy better interest rates than you would typically get from simply saving your money in a savings account. Instead of gambling on stocks, you can have that peace of mind knowing your money is better secured.
Limited Inventory
Ever since the pandemic started, more people are looking forward to buying their own homes. Others want to move to a different location near the suburbs but still a decent distance from the city. Some realized how great of an investment real estate can be during a crisis.
The problem is, with the high demand comes with low housing supply. Sellers backed out from listing their real estate in the market. They either want to boost their selling price before selling or their personal reasons stopped them from selling.
The pandemic caused a housing inventory crisis. This made buyers go through extreme measures like skipping a home inspection. Others opted for fixer-upper homes while some bought properties away from their ideal location.
Whether your goal is to buy a rental property or one you can flip and sell, you should not let your emotions dictate your decisions. As much as possible, never buy any property without a proper home inspection. Work with professionals like real estate brokers and you can get your hands on the newest listing and off-market listings.
Solid Source of Funding
These days, it can be a little tricky for investors to acquire quick funding. Mortgage lenders are being more careful in choosing borrowers they will approve or not. This is since more people are facing financial struggles.
Mortgage lenders and banks are still pro-profit businesses. They want to make sure their borrowers are capable of paying them back. As mortgage rates hold firm, lenders want borrowers to provide enough assurance they can pay before giving out funds.
When it comes to real estate investors, you need more than just a hard money lender to secure funds. You need a better and more solid source of funding minus the high interest rates of regular lenders. Thankfully, other real estate investors themselves are now providing funding to smaller investors.
Some real estate investors are lending funds to other investors who need the money to make investments. They offer quick funding at lower interest rates, which entices other investors to apply. Consider borrowing funds from other real estate investors especially if your lending criteria stop you from getting a loan.
Changing Buyer and Seller Behaviors
All the Covid-19 restrictions made buyers and sellers change their behaviors. Now, more people want to sell and buy their next property without putting themselves at risk. This led to them opting for online and contactless transactions.
If you are an investor actively buying and selling properties, there is now a critical need to make investments that will accommodate buyers’ and sellers’ requests. This can include online marketing, virtual house tours, online contract signing, and even digital payments. If you haven’t adopted these strategies just yet, you could already be missing the best deals and qualified buyers in the market.
There are many other real estate investment challenges present during the crisis. This may vary from one investor to another. What matters the most is that you learn how to adapt to the ever-changing real estate market so you can continue growing your wealth through investing.
