For investors, 2020 is turning out to be the best year to apply Warren Buffet’s core strategy: “Be fearful when others are greedy, and be greedy when others are fearful.”
Indeed, if you have a secure job and a steady cash flow going despite the general uncertainty caused by the coronavirus pandemic, you might find yourself in a rather enviable position to invest at a discount now, and reap your rewards once things return to normal.
As people with uncertain financial futures pull their money out of markets and into their mattresses, those who are in good financial standing should start looking for opportunities, especially in the real estate market.
A steady income is something that’s hard to come by, especially during this time. There are many service industry jobs that have been heavily impacted by the pandemic. Everything from gyms, bars, and waiter/waitress jobs are hurt by the economic downturn.
To capitalize on your steady income, real estate is your best option. Here’s why it’s still a good investment in 2020.
In an effort to inject more liquidity and stability to the economy amid the raging health crisis, central banks cut benchmark interest rates left and right. While this doesn’t necessarily make securing a loan easier for everyone, those with stellar credit scores get to enjoy lower mortgage rates.
A recent Gallup poll revealed that only 50% of Americans believe it’s a good time to buy a house, but as it turns out, we’re currently in an ideal buyer’s market. If you have been holding off on entering the real estate market even though you have enough capital and time to devote to it, now is the best time to finally do it.
Slow Growth of Property Prices
While negative growth is not in the forecasts, the growth of property prices is seen slowing down, especially if the pandemic and the quarantine restrictions employed to curb it stretches on moving forward.
In fact, prices of properties in San Francisco have already slumped following corporate directives that more employees can work remotely for as long as the health crisis exists. It’s even better if you’re loaded enough to be a cash buyer.
Distressed Sellers Flooding Market
There’s nothing like soaring unemployment when it comes to creating motivated sellers. There are a lot of distressed sellers looking to close deals ASAP, even at a sharp discount.
It’s a great time for you to hunt for bargains that will get you property for much less than its current market value. This will give you enough room to turn a profit a few years down the road when the world reverts to a seller’s market.
As discussed earlier, the coronavirus only provided golden opportunities for those who have already found stable financial footing before the crisis. Therefore, you can expect that not a lot of casual investors are looking to enter the real estate market right now. Those who have enough to invest though, are learning more about the real estate investment company they’re interested in and turning to investment guides right now, to be better informed while the “getting is good,” so to speak.
The Antithesis to Stock Volatility
The S&P 500 recently hit a record-high despite the crippling effects of the global pandemic to markets all over the globe. The surge meant that brokers and stock investors have fully recovered from the deep plunge that was triggered by the pandemic. But experts remain cynical. This sudden uptick won’t last long especially since scientists have yet to find a cure for the deadly virus.
With this much volatility and uncertainties, the best thing to do is to park your hard-earned money in a safe investment vehicle: real estate.
Prices Will Rebound
With real estate brokers launching into full-on virtual house showings, the National Association of Realtors is convinced that a rebound is on the horizon, at least for the property space. Many property owners and brokers are also taking the time to improve the overall wellness system of houses for sale in order to attract more customers, too.
Plus, given the fact that the health sector, and even governments, have been consciously telling people to stay indoors, why won’t real estate be an attractive investment at this very moment? After all, it’s the safest place to be.
Always A Good Time
While investing in real estate sounds so good at this point in time, it’s not just a trend that’s brought about by the pandemic. Land is a nonrenewable resource and is a necessity all around the world.
Property prices might go down for some time, but land appreciates in the long-run because of overpopulation and the ongoing urbanization in every part of the globe. Hence, pandemic or not — it’s always prudent to reserve a chunk of your life savings to own at least one piece of land in your lifetime.