Why You Should Buy A House During The Pandemic
Aaron Marshall is CEO & Co-Founder of Keyrenter Property Management, the nation’s leading property management and real estate franchise.
If you work in the property management sector, or anywhere in real estate, you probably get a lot of your friends and family members asking if it’s smart to buy a house right now. Heck, you might wonder that yourself.
But I don’t wonder. I think there are a lot of smart reasons to buy a house, sell a home or rent one out and manage the property — even with Covid-19 in full throttle and in the areas of the country where the virus is still out of control.
So if you’re asked what advice you would give somebody thinking of investing or working in real estate right now and you’re at a loss for words, feel free to use mine. I’ve got a few reasons why I feel like anyone working in property management and real estate should feel optimistic right now.
The Virus Isn’t Disappearing Any Time Soon
OK, that’s not an optimistic thought, but it is a reason to keep doing what you were planning on doing.
At the beginning of this pandemic, when we didn’t know as much about the virus and nobody was sure how things would unfold, it was reasonable to hold off making purchases or any major decisions with your life and money. But unless you want to hold off indefinitely, since this virus doesn’t seem to be likely to depart any time soon, we all need to get on with our lives.
Now, I realize that there are limits to this argument. If you were planning on buying an escape room franchise in the near future, I wouldn’t suggest that — simply because you need to move on with your plans. Reality is reality, and as we have learned, the virus seems to thrive in indoor air, and so there are some types of businesses and industries that are faring worse than others right now. Much as I enjoy bowling, I probably wouldn’t put my life savings into buying a bowling alley right now.
But creating and growing a business — if it’s the right business — is going to make you stronger and more able to outlast this pandemic. Retreating and seeing your income shrink is going to mean you have fewer options when it comes to withstanding the pandemic and simply living the type of life you want.
Property management is a good business to have during a pandemic, or any time, because everybody needs a place to live. That’s never going to not be a thing. Even in a zombie apocalypse (OK, especially in a zombie apocalypse), people need shelter. And as it turns out, during the pandemic, many people are looking for better places to live, rather than staying put.
The Real Estate Market Is Hot Right Now
The National Association of Realtors came out with a report that said existing home sales just hit its highest level since December 2006. In the middle of a pandemic. And it isn’t like the economy’s doing so great right now either. But people are still selling and buying homes.
Even in cities that are seeing people fleeing, like San Francisco, there’s still a healthy demand for homes. I would obviously suggest being far more cautious about buying property in a densely populated city that has higher levels of the virus. You want to scrutinize the economic health of the neighborhood where you’re thinking of purchasing property and not make any rash decisions. But if you find a good deal, and especially if you’re thinking of renting out that property, there are still going to be people in the city who need a good place to live — and there’s been plenty of talk that the supposed death of cities is premature.
Would I suggest that you rush out and buy all the property you can in a big city? No, or not necessarily. I’m just saying that there are no hard and fast rules for anything governing real estate right now.
Interest Rates Are Low
They’ll likely remain low for the time being. The Fed is expected to keep interest rates low, around 0%, until at least the end of 2023. That means you don’t have to feel like you need to buy a house now before rates go up, but it also gives property management companies the confidence that the economy will remain as stable as possible for the time being — and that gives investors a lot of time to prepare and plan.
If you’ve had your eye on a few properties but wanted to buy them piecemeal and methodically, you have time, and there’s no reason why you shouldn’t continue with your plans.
At least that’s how I see it. It’s certainly a challenge right now to run a business and to make money. But we’re always facing challenges, whether it’s a health issue or perhaps having to deal with an aging parent or struggles with our kids. Our great-grandparents were trying to keep their heads above water in the Great Depression and struggling to stay alive during World War II. The Great Recession a decade ago definitely set plenty of people back, and yet many business startups ended up thriving.
There is no perfect time to start or grow your business. At some point, something is almost always going to go wrong. Your job, as an entrepreneur, is to make things go right.
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