You may have read it somewhere in a holy book. If a man who has a set of precious jewels finds stones greater in value, then he’s bound to sell his old treasure to get the bigger prize. There’s a catch though. What if you’re not really sure about the value of the newer treasure? Indeed, there’s a certain risk involved in such a transaction, and in any business for that matter.
A fine example here is Jeff Bezos, the legendary founder of Amazon. For years, it would seem Jeff was heading towards bankruptcy as his company wasn’t earning. Of course, that’s all hearsay, now that Amazon has become the biggest success story of the pandemic (and Bezos the richest on the planet). What many don’t know is Jeff Bezos was a VP in a hedge fund in his 20s. When he got his brilliant idea, he left the company that could have earned him millions to start Amazon – to his mother’s disgust.
The same holds true in real estate. Finding the right opportunity could lead you to greater success. That’s especially true now that we’re in a seller’s market, thanks to the pandemic. That means there are more property buyers than there are properties for sale.
The good news is there are great investments to be had in such a market. Call theme your rare gems. They may not look like it but with the right touch, they could get you the bottom line you’re looking for. Below are five real estate opportunities that have the biggest potential to do just that in 2021, despite the virus.
Repurpose Unwanted Commercial Property
All the chaos that the pandemic has introduced to America meant many establishments are out of business. Additionally, commercial properties (e.g., hotels, office space, retail) may not be doing so well given the challenges of such a market.
Now, the market may have changed but it doesn’t mean the exchange of money is not happening. A new set of businesses are taking the spotlight right now. A good way, therefore, for you to earn handsomely from such commercial properties that are not doing so well is to adapt them for another purpose.
Convert such less-performing real estate to serve a current or future demand in the market. As hospitality is taking a hit, for instance, you can find better ways to use hotels and casinos. For one, industrial real estate and affordable housing have never been so in demand.
Industrial Real Estate
Think about all the essentials you need at home. As the demand for masks, PPEs, and all sorts of materials to survive the virus skyrocketed, so did the need for more industrial real estate. It was the virus that pushed such demand to astronomical heights.
Now, there’s a rise in companies seeking warehouses, distributions centers, cold storage, and data centers. It may be temporary but judging from how we’re still fighting the virus for over a year now, it’s not going to change anytime soon. A glorious example here is Amazon; its unprecedented rise also meant its warehouses multiplied like never
If you take a quick look back, flipping houses were booming in the 2020s. There were fears of course with the virus around. But demand soon outpaced supply creating the seller’s market we are in. That trend has not changed and is not changing anytime soon.
Thus, looking into a house and lot for sale at a low priceshould bid you well in these times. That’s putting in mind that demand for newly renovated properties is still high in the middle of this year. If you’re an investor waiting to fix and flip, there may not be a better time. You just have to do your due diligence and snap a property worth flipping.
As incomes fall during the pandemic, many people would find it hard to fulfill their mortgage obligation. A foreclosure wave is expected in 2021. Sans the moratorium from the national government on foreclosures, you may see properties sold at very affordable prices.
In October 2020 alone, about 4.57% of residential loans are delinquent by as much as 90 days or more. That’s about 2.258 million properties. Now, the government may try to ease such tremendous pressure on lenders. But eventually, banks may make their move, and they have to reconcile their books.
The foreclosure wave after the Great Recession should show you the way. Then, thousands upon thousands of nonperforming assets were sold right on the secondary market. Then, these loans were purchased at a very steep discount. In short, it was like a gold mine.
Rental Property From Cash-Strapped Landlords
There’s another trend that could be worth looking into. Thanks to the virus, a mass exodus is happening from the mega-cities to rural areas. People simply prefer fresh air and less risk from the virus.
What that means is many residents would be fleeing the big metro centers and looking at cheaper options in the suburbs. Put in the mix eviction moratoriums and you have thousands of landlords bleeding dry. They can’t evict nonpaying tenants but still have to make the building work (e.g., repairs, insurance, mortgage).
That could force many of these landlords to sell. That’s your cue. If you can negotiate a deal, find some cash, you could snap up rental investments at unbelievable discounts, with a little patience.