When the financial times are good, it is hard to remember there was ever a time when they were not.
For the past 10 years, everyone has been jumping on the real estate investing wagon. Many profited big, but some people were still nervous about jumping in and were waiting for the “right time.”
Even as a successful real estate investor, I feel like I missed the boat on a few opportunities and got started on strategies too near to the top of the market.
Handling Pre-COVID-19 Purchases
Last month, I closed on two Airbnb homes in Gatlinburg, Tennessee.
Yes, it is home to Dollyworld and the Smoky Mountains. Business Insider sang the region’s praises in 2015, writing, “The Great Smoky Mountains National Park boasts an unparalleled location. Spanning both East Tennessee and North Carolina, the Smokies are just a day’s drive from over 60 percent of the nation’s population. With 9 million annual visitors, the GSMNP is the most visited national park in the United States!”
In a fantastic BiggerPockets Podcast, Avery Carl also talked about all her booming Airbnb properties in Gatlinburg. It seemed like a fantastic place to invest. And it likely will be, too! Just not for the next few months (or maybe a bit longer).
Short-term rentals were unstoppable a few weeks back. Then—boom—the COVID-19 outbreak stopped everything in its tracks. We are currently advertising the homes as a “luxury quarantine hideaway” until the park and tourist areas reopen.
I could easily be discouraged. History indicated that a correction was looming, as it has every 10 years. I should’ve known!
I knew that I was paying top dollar for the homes but believed the Smoky Mountains would never lose traffic for any reason. Naturally, no one predicted a global pandemic.
There’s my confidence strike number one.
At this time, I could become frustrated that the 20% monthly profit I conservatively calculated may go into the negatives for the unforeseen future.
My confidence starts to shake harder now.
If this can happen, how can anyone possibly invest in real estate?
Decisions During a Pandemic
My inner dialogue could be saying, “I don’t know what I am doing in the Airbnb market,” or, “Real estate is too risky!”
As Brandon Turner says, “I should just go watch Netflix and let my money earn .002% in the bank.”
At least then my money will be safe. I would with 99% certainty—unless Wells Fargo Bank goes out of business—know where my money is.
If COVID-19 has shown us anything, it is that the world is unpredictable. There will always be variables we cannot control. In real estate investing, there will be variables we cannot see or predict.
The other side of the certainty from leaving your money in the bank is that you will never reach financial freedom. You will always be stuck working for someone or chasing the next dollar because you have not utilized the power of real estate or investing.
Investing is a vehicle that will grow your wealth. But there is no money-back guarantee.
What I can count on is my dedication to continue growing my wealth in real estate and navigating through the changing times. I can count on analyzing deals even better than before. I can count on my buy and hold properties to balance out the temporary loss of revenue from the new Gatlinburg homes.
Ultimately, who will be further ahead: The person who takes a chance, or the one who sits backs and watches because they are afraid of not being able to control every variable of a real estate purchase?
No one knows with any certainty at any time what the future of the real estate market holds, but we see a market correction coming. And when it happens, there will be some great deals to buy.
As an investor, you always want to be watching for opportunities to arise. You need to know that even if one of your properties dips in profits, not taking a chance will ultimately hurt a lot more.
Don’t let COVID-19 shake your confidence. There’s little chance you’ll ever regret making the defining choice to become financially free through real estate.
No one gives you confidence; you need to take and own it. Otherwise, you can rely upon the real estate truths from one of the richest men who ever lived, Andrew Carnegie: “93% of all millionaires become so through owning real estate.”
If your goal is to hit that seven-figure mark, those are odds worth betting on.
If you need some quiet time to think it over, regain your confidence, and plan out your strategy, I know of two great luxury quarantine hideaways in Gatlinburg that you can rent for a steal over the next few months.
How has COVID-19 affected your real estate decisions?
Share your thoughts in the comments below.