Are you a seasoned investor? Perhaps you were considering the advantages of having investments right before the pandemic hit? Either way, we bet you’re now second-guessing every opportunity that is presented to you. Investing in land and real estate properties, for instance, has already been murky before the pandemic hit. Now, though, it becomes more difficult to make a decision.
Record-low Mortgage Rates
With all the lockdowns and shelter-in-place mandates, many industries’ futures became uncertain. Some companies and businesses had to furlough employees, file for bankruptcy, or permanently close. Certainly, as an investor, this does not give you confidence in the future of your investments.
However, it was during this time that banks and home financing companies offered the lowest mortgage rates on record. Some lenders have gone as far as offering 30-year mortgages with under 3% interest rates. Given this data, it’s tempting to just take out a mortgage on your potential investment property. However, while the low mortgage rates will certainly make things more affordable now, it could still rise in the future. So that’s something to think about.
What’s Your Financial Ability?
Granted this should be the first question you should ask yourself before you even play with the idea of investing in properties. Do you have enough money to invest in a house and lot? Or do you only have enough to secure an apartment in a high-rise complex? Both scenarios will yield good results if managed correctly and given the right time to sell or rent, which begs the next question. What do you plan to do with your investment property?
If you’re looking to sell, you might want to look at flipping houses instead of an outright investment in land development projects. You would usually be able to lowball home sellers whose homes need extensive repairs and upgrades. And if you do the flipping yourself, you can expect a substantial profit from when you are able to sell.
How to Finance Your Investment Property
There are three ways to come up with the funds to invest in property:
- You could do it yourself, with the available funds that you have and loans that you can take out to fill any other funds needed.
- As part of a pool investors (though, this is usually done in property development where stakeholders eventually get dividends once buildings or houses are in place)
- As a corporation. This is especially beneficial if you plan to invest in a commercial property where all contracts and division of profits is drawn up professionally.
What this means for you is that even though you may not have all the funds you need on hand, with the right bank and the right people, you could soon be the proud owner of your very own investment property.
Investing in Mixed-use Properties
You could invest in two types of properties: residential or commercial. A mixed-use property would be able to serve both purposes. During this time, it might be a wise decision to look at this type of investment. Storefronts may be closing now, but once things open up again, this could be a potential moneymaker.
Look at investing in properties in tourist towns as well. With lockdowns starting to ease, more and more people are trying to salvage what’s left of their summer vacation. It’s true that you won’t make a profit at this time when you’ve just recently invested, this trend is indicative of what the future might hold. People will want to travel once again, see their friends, and have family vacations they may have put off because of the pandemic. You can take advantage of that trend and invest in properties now that would surely profit later.