Coronavirus Updates

Has COVID-19 Threatened Your Investing Confidence? Press On—Here’s Why

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When the financial times are good, it is hard to remember there was ever a time when they were not.

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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?

Related: Airbnb & Coronavirus: How to Survive Short-Term Rental Losses

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.

Related: How to Build Massive Wealth During a Recession: Master These 5 Principles

Looking Forward

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.

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How has COVID-19 affected your real estate decisions?

Share your thoughts in the comments below.

Tamar Hermes is a full-time real estate investor and educator. After building successful businesses in the retail and entertainment industries, she turned her attention to real estate with a missio...
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    Wenda Kennedy JD from Nikiski, Alaska
    Replied 4 months ago
    Your right. I too didn't see this Black Swan coming -- but it was time for something to happen in the normal real estate market cycles. Who would think that a global crisis would hit us this fast and hard -- and have such a localized effect? This is my 5th cycle since I became an adult so I have a long point of view on all of this. I'm retired in Alaska. Our population where I live normally doubles every summer. It ain't happen' this year! Tourism isn't going to get it. The oil market has collapsed. That's the main year around industry. I hope the fish come in this summer... So, it's back to basics -- a healthy emergency fund known as reserves -- well-funded sinking fund accounts for major repairs -- lots of equity vs. debt -- a good Plan B for when the world falls apart THIS time -- enough backbone to keep the panic away when the sky starts falling --
    Tamar Hermes from Los Angeles, CA
    Replied 4 months ago
    Amen Wenda! It sounds like you have your bases covered. The good news is that what goes down always comes back up! Alaska sounds beautiful. I have always wanted to visit. I will be dreaming of all the fish coming your way this summer.😀
    Luis Rivera New to Real Estate from Puerto Rico
    Replied 4 months ago
    Thank you for sharing your thoughts on the matter! Completely unrelated but, do you have any thoughts on Robert Kiyosaki's strategy of buying properties focusing on cashflow?
    Tamar Hermes from Los Angeles, CA
    Replied 4 months ago
    @Luis Rivera Hey Luis, Focusing on cash flow is a great idea. If you want to live freely, you need monthly income coming in to pay your bills. That said, if you love your work and earn a good salary, appreciation is a great way to grow your wealth and usually adds up to more than cash flow. Look at your goals and decide where to focus.:)
    Dave Rav from Summerville, SC
    Replied 4 months ago
    Nice inspirational message! Yes, we need to press on. Adapting to the current circumstances will be paramount to success. Eventually "this too shall pass"
    Tamar Hermes from Los Angeles, CA
    Replied 4 months ago
    @Dave Rav Well said! You have a great attitude!
    Gerald Pitts Rental Property Investor from Nashville, TN
    Replied 4 months ago
    I really needed to hear this reminder. I am in the exact same scenario. I bought first Smoky Mtn property in Oct, and 2nd one in Jan. My default is to overthink, over-analyze, get stuck on the sidelines for way too long. So now this can feel like an over-correction. :) Happy to say that the numbers were great before the zombies, and that they are picking back up now very steadily. Wishing you much success. The BP forums have been a great resource for me. I'm here if you have any questions.
    Tamar Hermes from Los Angeles, CA
    Replied 4 months ago
    @Gerald Pitts Thanks, Gerald! Congrats on your purchases! The area seems to be climbing back quickly in the Smoky Mountains. Also, during a recession and COVID-19, people won't fly as much, and the Smokey Mountains offer a great vacation in just a short drive away.
    Arlene Dayoan Real Estate Investor from Los Angeles, CA
    Replied 4 months ago
    This article is a great reminder that without risk there are no rewards, and that having a diversified real estate portfolio is key. No one could have predicted a global pandemic in 2020, but if people view this period of chaos as an opportunity to build wealth, they will be rewarded in the long run. Be confident that the real estate market always rebounds.
    Tamar Hermes from Los Angeles, CA
    Replied 4 months ago
    @Arlene Dayoan Thanks, Arlene! Yes, we all need to diversify and capture this opportunity to grow wealth!