Real Estate Investment in the shadows of a Pandemic

With all of the chaos produced by the coronavirus pandemic, it may appear that now is not the best moment to buy any form of real estate, let alone an investment property or a second house. But don’t dismiss the possibility entirely.

With the government’s recent decision to exempt real estate transactions from the 15% Value Added Tax (VAT), it is a wonderful time to think about investing in real estate because you’ll have greater purchasing power.

Why are individuals thinking about buying?

Buyers have been drawn in by cheap borrowing rates and the possibility of a recession, which might slash housing prices.

Because of the possibility for both gain and cash flow, more people are considering real estate as their next investment. It’s also a genuine, tangible asset that gives you more control over your money than other investments.

The advantages of purchasing an investment property

A valuable asset and an excellent strategy to produce passive income is an investment property. The ability to hold a property with the possibility for appreciation and cash flow is a significant benefit of purchasing an investment property. It also protects your net worth by diversifying your investment portfolio and diversifying your investments as the market fluctuates.

Before you buy, take these measures.

Buyers should, however, be prepared for the prospect of a long-term economic downturn. It may take some time to find tenants if you’re buying a property that doesn’t already have tenants. As a result, cash is the most critical thing to have on hand when purchasing an investment property.

Because investment property owners are liable for repairs and maintenance, as well as tenants who do not pay rent on time or for the time that may elapse between tenants, they will want funds to cover any potential snags.

To obtain a better idea of how much rent you might be able to get, talk to local real estate specialists and ask for historical rental prices from previous years.

This can give you a decent idea of how market downturns or booms might affect your income or property worth.

How can you figure out whether something is affordable?
You don’t have to be a millionaire to buy a second house or invest in real estate. We recommend that you ask yourself two questions to see if you’re ready to buy.

Do you have a solid cash flow and could you go six months without getting rent?

If you can’t say yes to both of these questions, now is probably not the best moment to invest in real estate. Buyers should use caution, just as they would when purchasing a primary residence. If you’re not paying cash for the property and will need financing, we recommend that you get pre-approved.

Pre-approval will tell you how much the lender is willing to lend you for your second home purchase. Understanding and adhering to your budget is critical, especially when making an investment.

Buyers should conduct due research to determine what they can afford, and we recommend working with a local real estate agent to ensure that you are purchasing a property at a fair market value.