Coronavirus ‘tsunami of foreclosures’ is coming. If you or someone you know is facing foreclosure, PRI would like to hear from you. Please email investment advisor Pri at Pri@BeautifulCity.US.
Even before the coronavirus pandemic, the U.S. was experiencing an eviction crisis. With evections comes vacancies and loss of revenue for landlords. This makes it difficult for rental property owners to meet property-related expenses including mortgage payments.
Even homeowners who have lost their otherwise stable jobs are finding it difficult to keep up their mortgage obligations.
Experts expect the eviction crisis to get far worse in the coming months. Here are some reasons why:
1. Between March 25 and April 10 of this year, nearly half of renters aged 18 to 64 reported that they were having trouble paying their rent (source: the Urban Institute)
2. Federal and State eviction moratoriums will end this month. (Source: Princeton University’s Eviction Lab)
3. The extra $600 per week in federal unemployment benefits is set to expire at the end of this month too.
We are already in “Coronavirus recession” and as foreclosures start, it’ll make acquiring properties easier than ever but on the flip side, it’ll make selling the properties more difficult after they have been fixed up for those thinking about flipping houses.
Property values will drop significantly especially in the under $200,000 range in the Ohio market.
As the recession slowly ebbs and starts to recover the real estate market will also improve and property values will go back up again. For right now though the market volatility is such that if you do not research each property thoroughly then you could be in danger of losing your money. Be as careful as you can and protect yourself. Any investment deal can sour and turn ugly at the drop of a hat but if you do your homework and invest as wisely as you can you can minimize your risk in real estate investing.
Market indicators such as, knowing the area the property is in and what sales are doing in that area, what other investors are netting from sales in the same area, how long the properties in that area are have been on the market and how many have recently gone to auction can help you understand local trends and reduce the possible risks associated with investing.
As with the economy today the basic inventory is low at this time in the real estate market with not many properties available for the taking. But since the market is basically scarce of rentable properties it may take a significant amount of time to find the right investment.
You will need at least 18 months of cash reserves to buy an investment rental. Since every month that goes by will cost you money and if you do not have a lot of money, to begin with, this can be a dangerous time for you to invest.
Investing in anything can be tricky and risky. But if you are considering investing in real property it can less risky than investing in the stock market because real property is a tangible asset. Having tangible assets can usually save your behind if you get in over your head by just selling off that tangible asset.
Do not put all your eggs in one basket when it comes to investing in real property. Research several investment opportunities at once and if your first choice happens to fall through then you have a second and third choice waiting in the wings. Even though the real estate market is considered very volatile at this time, if you learn what you need to know about real estate investing you can live a quite profitable existence.