Should I Buy Investment Property During COVID-19

Real estate markets across the U.S. slowed considerably during stay-at-home orders and remain uncertain as areas cautiously begin to reopen. Real estate investors looking to buy income-generating properties ask, “Should I buy investment property during COVID-19?” The answer, like so many things in real estate, is, “It depends.” First, investors must dispense with the notion that purchasing properties during a pandemic could be viewed as profiting from the misfortunes of others. People who have listed their homes during this time really need to sell, and a willing buyer just might be the best thing that could happen to them right now. Many people have lost their jobs or consumed all their savings just getting by while they hope to return to work. They are not able to buy a new home, much less continue paying the mortgage on their current house. An investor with the means to conclude a sale for a homeowner who really needs a fresh start might be doing a good service.

Location and Labor Markets Matter More Than Ever

The pandemic-related market pause has disrupted the ordinary balance of supply and demand. Both are down, and so are home prices. On top of that, interest rates are extremely low. The wild card is that no one knows how long these conditions will last. Some predict a rebound in the real estate market for 2021, but no one knows for sure. Investors considering buying investment property during COVID-19 should look to locations where prices have declined appreciably but the underlying conditions for recovery bode well. Essential businesses and areas with future-oriented high tech and healthcare industries are worth a look. Avoid areas that were already suffering before the coronavirus hit, like locations that depend on a battered oil industry. Areas with labor markets that relied extensively on service and hospitality industries have suffered badly, but some have shown resilience through past recessions. Investors should research the odds for recovery in places like Orlando and Anaheim, where Disney has furloughed thousands of workers but likely will bounce back, or Chicago, where service and hospitality industries tend to rebound from setbacks. The Metro Atlanta area has held steady through the crisis, with major employers like the CDC and larger businesses holding the unemployment rate down. As one of the major property management companies in Atlanta, Georgia, Excalibur Homes can help investors locate good buys with strong potential for income and appreciation.

Consider Smaller Markets

Smaller cities and towns are less connected to the global economy and tend to be somewhat insulated from major global economic upheavals. Rural areas are gaining interest from city dwellers fleeing the density that perpetuates easier transmission of disease.