The headlines, right now, in the property space are all about the prices crashing, tenants not paying rent, businesses going bust and more doom and gloom than you can shake a stick at.

For the inexperienced or the uneducated property investor, it could be perceived that property investing is risky and going downhill fast. Certainly not a time to get stuck in, much the opposite I would guess looking in from the outside.

I’m not here to say property investing isn’t risky, it’s as risky as you make it. Why do I say this? For this we need to look at some facts and break down the headlines.

Property prices are crashing. ARGH

If property prices are crashing it can mean a few things and it very much depends on where you are on your property journey.

Have a large portfolio?

Then you, assuming your are not over leveraged, should be ok to ride this out, you hopefully have tenants who are still paying their rent, your mortgage prices won’t have changed dramatically and even if you have a few non payers, I would hope you are not leveraged so badly that a few missing rent payments for a few months would cripple your business. Yes you might not be able to refinance out cash for more purchasing but you should still have a income generating portfolio.

Buying your first property?

Now is the time to get out there and find some great deals, prices will be coming down, Landlords who were accidental or coming towards the end of their journey will be looking to get out and some possibly in a rush before the perceived crash happens. Get haggling and find yourself a bargain, possibly even a tenanted BTL to get you started.

Looking for Serviced Accommodation properties?

Whilst right now it looks pretty horrific for those owning SA properties or Portfolio’s we know people will eventually get back to AirBnB and Booking.com to find holiday lets. The good news is due to the immediate issue, those jumping onto the bandwagon of Short term lets over the recent years now will be sat on multiple empty properties with bills and rents/mortgages still needing paying. Likely they will offload some to help through these times, if you do your research you could bag a decent property that has a history of SA for when things pick back up.

HMO’s?

At times like these some will be looking to lower their outgoings meaning people looking for Rooms rather than full flats, sharing bills and accommodation costs will likely look attractive to a large amount of young professionals. Buying this type of property now at the right price could bag some great longer term gains once the market starts to pick up.

So what does this all mean?

Whilst the headlines show one side, there is always another side. To quote Warren Buffett

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

― Warren Buffett

Meaning if many are selling up, vacating and running away, it could be a great time to step in and pick up some great deals for pennies compared to when things are moving up.

If the prices are crashing it means everything is soon to be cheaper, if prices are cheaper then mortgages are cheaper, and if interest rates are going down then further still mortgage payments are reducing, now the main thing here is are rents reducing at the same level….well no, no they aren’t. Will they drop, yes probably, a bit, but people still need a place to live, now more than ever, off the back of this global situation I can imagine a fair few people on the market looking for new property to rent.

Don’t compete with 100 people when times are good, money is flowing, people are overly confident and you will pay over the odds. However right now, people are fearful and likely to be hoping to offload some investments quickly, with little competition you should’t need to fight much to pick up some good deals.

Interest rates are at an all time LOW!

With interest rates at all time lows, leaving money in the bank will not likely make you feel great. £50k would likely get you £500 back at best right now, and that will likely be far from what most would get (£50 in most basic high street banks).

It wasn’t that long ago when people were seeing 15% mortgage interest rates, great for savers, terrible for home owners…

Grabbing a Below Market Value (BMV) property now could reap huge rewards in the future. Those who have studied property, will be familiar with the property cycle and will know there are bubbles and crashes but over the longer term prices rise. If we are now in a 2008 style crash then those who bought at the bottom of the crash would now be the most protected from the current situation. Don’t look back at this time and wonder why you didn’t buy and instead left the money in the bank to, in real terms, lose value (yes you read that right, money left in a bank at under 1% interest is essentially losing value), as the costs of living will be greater, meaning your money buys you less in real terms.

BEFORE YOU BUY.

Warning, buying anything right now, isn’t what I’m saying, buying SMART now and at below market value is what will help you ride the crash out and be set up to come out in a strong position.

3 things to look out for

Location, location, location.

Technically 1 thing really, said 3 times, but that’s how important it is when buying property. Buying in the wrong location can mean you end up with a dud property. Too far out of town and it will be harder to rent and hard to get higher rents compared to more central locations. Buying in the wrong area could mean coming out of the crash takes longer, typically the cities are hit hardest in % terms but also bounce back the quickest. That doesn’t mean out of city investments are no good, but research here is key.

Get the right property at the right price and you are going to be well placed to pick up some displaced tenants when the market opens back up. CoronaVirus (I know I said it and I tried not too) isn’t here for ever, but it will leave a mark. Tenants will be kicked out of properties by Landlords selling up. Rents should be fairly stable as people will be looking to lock down a safe place for the short term and the rental market shouldn’t be suddenly flooded with new property for rent due to the landlords looking to sell rather than relet.

My recommendation if you have money burning a hole in your pocket will be to keep a keen eye on the popular portals like www.zoopla.co.uk and www.Rightmove.co.uk for landlords desperate to cash out before the ‘big crash of 2020’. Have open conversations with agents and see what you can bag in the ‘sales’ but most of all make smart decisions based on data, not just price.

If you would like to connect, you can find us on most social platforms, just don’t look on TikTok as my dance moves are too good to be seen.

Stay Safe, Stay at home and Stay positive.

OneFourFour Property.