Should I Invest During A Pandemic?

The most pressing question of the day: should I invest during a pandemic? For the newbie investor who took the time to get educated and felt ready to buy that first property, and then the world came crashing down around our ears in the form of a virus, here are a couple things to consider:

What’s your exit plan?

Now more than ever, it is important to start a project with the end in mind. When you buy that first property, how will you get out of the deal? It is always a good idea to prepare several contingencies, different ways for you to make money even when the deal goes in an unexpected direction.

To flip or not to flip?

Do you have a good relationship with a general contractor? How are the restrictions on construction work in your area? Will there be delays in procuring materials? Is your general contractor busier than usual? Will he be able to focus on a project you bring him? Several months ago all construction came to a halt, and now that things are opening up again, the contractors in my area have more work than they can keep up with. Can you get your rehab completed in a timely manner?

Do you know your local market?

What are the restrictions around real estate in your area? Are realtors showing properties, and are those properties selling? This pandemic has people relocating in unexpected ways. Are people moving into or out of your area?

Are you screening tenants properly?

If your plan is to hold onto a property for the long term, what is your system for screening tenants? Do your tenants have jobs that will weather the pandemic? Are you willing to take on increased tenant issues? What are the laws in your area regarding eviction? Are you prepared for tenants to not pay rent for a period of time? Do you have cash reserves to cover your expenses if your tenants cannot pay?

Chaos breeds opportunity

The pandemic has heightened the importance of having a solid action plan, but it has not changed the fundamental risks and opportunities of real estate investment. Market upheaval always creates opportunity, so perhaps the most important question is: are you positioning yourself well for the future?