Every investment strategy has its ups and downs, which is why you draft a business plan.
Business plans help keep an investment property bullet proof.
Right now is actually, not a horrible time to buy investment property. Sellers are lowering their prices because the demand has lowered. It is supply and demand basics playing a role in how investment properties are being priced. As an investor, this is actually a green light to pull the trigger on buying that next investment property.
There are going to be crucial factors, that investors will need to implement to their business plan for a newly acquired building.
Investment Property Tips Post Pandemic:
- Pick a property with low initial repair costs. You do not want to buy a property that will require a large sum of money up front. ARV will have to be adjusted accordingly.
- Expect vacancies, when you are visiting potential properties. With Covid-19 there are many unemployed people fleeing from their leases. Once the economy picks back up, the demand for affordable housing will increase.
- Lowering rents is a trend that we are already seeing with current investment property owners. Remember having a vacant unit costs more than lowering the rent by $200. If you do have a vacancy lower the rent when marketing it, to cover overhead costs from the purchase.
- Put any new construction on hold, unless it is needed to keep a habitable standard of living or poses a health hazard. Extra ordinary costs like cosmetic construction is unnecessary at this time.
After reading this, you might think… no thanks, I am going to wait on buying my next investment property. Hold on though. We are seeing Los Angeles regulations lifted slowly but are being lifted! This means we are closer to the end than farther. Jumping in on lowered investment property costs is something new investors dream of! Take advantage of the market, for what it is, and continue to build your passive income!
