The Covid Crisis: Should You Invest In A Property?

  • 8 years ago
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The Covid Crisis: Should You Invest In A Property?

The Corona virus pandemic is a tragic global health crisis that has changed life as we know it, and has had one of the most significant impacts ever on the global economy. As governments struggle between public health and economic choices while battling Covid-19, one view seems to be gaining ground: that trade-offs in real estate are different in the developing countries like India.

As Covid force people to stay at home many people are re-thinking about selling, buying, and re-investing in properties. This is the right time to buy a property because buyers are likely to get better deals and prices shall definitely go up in the span of next two years, now is a good time to take calculated risks. While there may be several deals available in the market and the scope for negotiations maybe high, buyers should do their due diligence well. After the stock market volatility where only a few stocks are on the rise and rest all taking a beating, people should not be taking risk with their money. Investing in properties has become exciting and very rewarding if you make the right choice.

The real estate prices in the country would drop by up to 20% in the wake of corona virus pandemic and the resultant nationwide lockdown. For potential home buyers and commercial investors, who have job security or cash flows, it is an excellent buying opportunity. A lot of repossessed properties shall definitely be available in the open market over the next few months.

Commercial Property Investment has constantly been a mystery for a common investor. There is a general perception that Commercial Property Investment is meant only for a business class or big investors, though it is not always true. I keep getting queries on Commercial Property Investment from the common investors. Investing in commercial real estate is not as difficult as it may appear. If you follow the principles of long term investing, you can earn much higher returns. Investing in rental properties is among the most active and time-consuming forms of real estate endowment in which you can engage.

One potential benefit of investing in a rental is that it has the possibility to provide two types of return. First, it can provide appreciation over the long run, as the property value increases over time and due to improvements made by the owner. Second, the owner also has the potential to realize a stable return in the form of positive cash-flow on the asset — earned by renting the property out to tenants for monthly payments that exceed the owner’s overall monthly expenses to maintain the property. The investment can be more advantageous than investing in residential real estate, but it is a little trickier as well. If you have an appetite for commercial real estate and are looking for long-term investment, this is the right time to invest.

It’s virtually impossible to predict how long the pandemic will impact the economy, but history shows that Indian real estate markets always bounce back much faster than the Punters or the Pandits predict. I personally suggest that you sleep much better with your investments being concentrated in real estate rather than in the much more volatile stock market.

Experience in Real Estate 32 years

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