EMERGING OPPORTUNITIES IN REAL ESTATE

The COVID-19 pandemic impacting every level of the economy is unfortunate, but it is a fact that disruptions in the real estate industry tend to create great opportunities for savvy investors and entrepreneurs. However, fluctuations in the marketplace will only work in favour of those who are willing to adapt to the shifting landscape.

Despite foreclosures declining for the better part of a decade, financial hardships brought about by the Coronavirus are bound to increase the number of distressed homeowners. This means investors should focus their efforts on identifying and securing distressed homes.

Financial Institutions adopted a leniency approach to aid temporary postponement of mortgage payments to avert the repossession of property. These programs will keep more people in their homes and prevent them from defaulting on loans. That said, the programmes are not designed to last forever, and compounding payments over the course of such programmes could cause more harm than good. Homeowners in distress should make the decision earlier on to enlist the help of a reputable estate agent, price their property well, and sell as soon as possible. Major banks also offer assistance in their distressed selling programmes to such owners.

The decline in property prices in many parts of the country presents a lucrative buying opportunity for prospective investors that want to buy and hold properties. Low prices and the current record low interest rates will save an investor thousands of Rands over the life of their bonds. Rental property portfolios are already viewed as one of the best wealth-building vehicles in today's economy. Buy-to-let real estate strategies have been justified by decades of appreciation and cash flow. Home values and rents have traditionally increased more than they have decreased over long periods of time.

Buying property as an investor is a completely different experience than buying a home for yourself. One must look at properties strictly through a financial lens and divest oneself from emotional attachment. Keep the following in mind:

• Know the housing market in the area you want to buy
• Know all the costs upfront
• Calculate your operating expenses
• Estimate your rate of return
• Invest in a property with low maintenance costs
• Calculate the worst-case scenario
• Get pre-approval for finance.
• If you get a good deal, act quickly.

Historically, disruption within the real estate sector has resulted in amazing wealth-building opportunities. Today's most prolific investors will be those who are savvy enough to identify such in the constantly evolving housing sector.