Real estate has always been considered as a safe and secure investment. However, does it still apply now with the pandemic affecting tons of industries and markets?
If you have been planning to enter the world of real estate, it is only normal for you to be worried about how the coronavirus will impact your investing plans.
So, the million-dollar question now is, is this the time to buy real estate?
Although property sales are still down, there are a few signs that the current situation may result in higher confidence in buying real estate. The truth is that properties are safer investments than what you think during this worldwide crisis. Read on to know some of the reasons why:
Real Estate is More Stable Than Other Investment Forms
Compared to other types of investments, real estate properties enjoy long-term stability. For example, stocks are more volatile so they tend to suffer from negative effects during economic crises. Commercial real estate, on the other hand, won’t see the effects of the pandemic until much later due to the market’s nature.
One more advantage of buying real estate is that unlike stocks, these are physical assets you can use. This means that even when there is depreciation in the overall value, you will still have a physical asset. A real estate property is a safer choice for people who are willing to make an investment.
Of course, since the pandemic is still ongoing, the available information is not enough yet to have an accurate prediction of how things are going to play out in the future. There is no way to tell how long the world’s economies will remain shut down, when the quarantine measures can be finally lifted and when people will be able to start spending their money all over again. Thus, it is still impossible to predict the exact way the real estate market is going to look in the near future.
But, it is possible to use the market reactions to past pandemics as future indicators. H1N1 and SARS both resulted in the real estate market’s short-term volatility yet the market became stable again in 3 to 6 months in each case. It could mean that even during scenarios like the present one, real estate will continue to be stable and be among the best places where you can invest in.
Reduce Your Risk When You Invest in Real Estate
While real estate has a good risk to yield ration, you can still follow some best practices. In such times, it is better if your investment is less risky.
New equity projects can be a great place where you can invest in since your investment will give you solid returns once the property prices also go down. Your best option is to look for safer investments. You can also invest in some properties with low risk through crowdfunding.
Probably the safest types of investment right now are debt investment opportunities. While your return on investments might be lower compared to other types, it is also a lower chance that you will lose money.
In these uncertain times, buying real estate might be a good choice but as much as possible, stick to options with low risks to keep your money protected.