Property development and renting during uncertain times
Unless you live on Mars and potentially even if you do live on Mars you will have noticed our latest pandemic across the globe. Covid-19 or Coronavirus. At first it was this thing in China which looked bad. Then it started spreading, Europe and the US and eventually the globe with a few exceptions (apparently).
Tough times
If you are in property you will have undoubtedly been affected in one way or another through the property business, if not personally as well.
Investors have had tenants not paying due to low or no income.
Investors would not have been able to evict tenants even if unrelated to covid.
Investors would have had developments grind to a halt.
Investors would have had income lost
...Serviced accommodation sitting empty
...finance pulled
...down valued properties
and much more.
Investment opportunities
The positives, yes there were some positives.
I've seen property prices increasing in certain areas mostly fuelled by the Stamp Duty giveaway.
Tenants who would have traditionally been in houses would have moved to flats or even rooms in HMO's pushing up demand in some areas
Tired investors looking to offload properties have hit the markets with some competitive pricing to move before the stamp duty giveaway ends.
Mortgage rates dropped, crept up a bit, and then dropped again for certain investment types.
and again much more.
So what does this all mean?
As you can see above and as Warren Buffet has said
“be fearful when others are greedy, and greedy when others are fearful.”
As you can see there are issues to be fearful of, however there are also lots of new opportunities, cheaper properties with demand in set areas and cheaper financing means you can get into property now and ride the wave when it is climbing again, of course it might not climb straight away and this is why due diligence and your investment calculations on ROI are so important, the deal needs to stand on it's own two feet regardless of the market conditions as much as possible.
There are absolutely people out there who are hurting in property right now, most people in Serviced accommodation who didn't lock in long term contractors or health workers will likely have taken 6+ months of losses if not completely empty properties. This is why it's so important to ensure you are aware of the downsides but positioning yourself to succeed, using multiple strategies to spread the risk would help here, with hindsight I'm sure a few will be kicking them selves who are 100% committed to SA but others would, pre covid be kicking themselves for not being in SA as everywhere you turned people were sharing massive profits from their SA portfolios, most of which are no money down meaning higher rents to pay now with no equity to lean on. This isn't about downplaying SA, more to say reduce risk where you can by diversifying.
Stay safe out there.