My Realty Gains

It’s been more than two months, there’s no sign of the pandemic going away. We’re more clueless than ever before, hoping for things to get back to normal. Looking at the no. of COVID cases globally, anyone can predict that the pandemic won’t go away any day soon.

However, the economy cannot stop. We cannot stop working, as this is how we earn for the livelihood. Not all industries will allow work from home jobs. Various sectors such as manufacturing, production, agriculture, etc. need laborers to work in factories thereby bridging the gap between demand and supply on a daily basis. This is how the economy usually works, focusing on the demand and supply of the country.

Now, based on the above notion, there are certain signs of some restrictions and recommendations that might go away by the end of this month or next. This is good news, as the lifting of restrictions can allow ample opportunities to come along.

These opportunities need to be aligned with social distancing policies as the pandemic cases, are still on the verge of rising. Meanwhile, many companies, especially in real estate are remaining vigilant and making sure that their property managers remain effective and efficient when it comes to bringing out due diligence.

Taking extra precautions will come in handy, in order to ensure the well-being of the property employees and the overall residents. When we talk about “well-being”, the companies are adhering to all of the changes that are; bringing additional cleanliness measures, limiting the accessibility to all of the public spaces (pools, gathering rooms, etc).

This inclination towards cleanliness is the need of the hour, as opening up spaces too early might create several issues that may halt the business operations. Companies are already suffering from the loss of revenues with respect to real estate, therefore further escalation of damages will make worse.

As discussed earlier bringing in the emerging technologies into the picture, in all aspects of multifamily realty investing. Organizations are now using these than ever before; identification of locations to scout for deals, ways of underwriting, how to manage property effectively, etc. are some of the things which are being addressed by them. The outlook of the realty industry has been that the leasing and receipts will further go down based on the April and May leasing trends. However for some companies its completely the opposite.

Companies today have established a whole new form of online payment infrastructure in all of their real estate properties and have initiated virtual tour offerings to its clients. This is how companies are mitigating the risks brought by the pandemic in the US real estate markets.

Unemployment and Underemployment are some of the major concerns for real estate markets all across the nation. As without a job, consumption crisis can be expected. But, despite such worrisome nuances, the rent collections from expected rents were approx. 98%. That means, company’s were successfully able collect the rents on time.

The best way to deal with uncertainty especially with respect to real estate is by being honest and flexible. Through communication with the residents in an emphatic way, can do wonders. Companies are acknowledging this fact and ensuring that the needs and expectations of their residents are being met.

There has been a significant rise in demand for affordable rentals in certain places in US. In March and April, residential demand for “workforce housing” have grown.     Various real estate behemoths have purchased properties below their true value. They’ve heavily invested in improving the residential properties such as bringing wooden or customized flooring,installing brand new appliances, brand new kitchens, and other extremely sought-after offerings like covered parking and additional space storage.

Regardless of the state of the market, such offerings will exhibit the perceived value, that can be leveraged by anyone. The properties in Texas and Alabama have seen a growing level of interest and exposure during the pandemic days. However, the realty investment in growing regions with expanding and diversified job markets, still need to showcase the expected signs of resiliency.

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Opportunities On Its Way

It’s been more than two months,Despite of few changes, somethings will remain perpetual at least to a certain extent. In the past, many of the possible tenants visiting the residential properties would come by in-person to tour the units. Today the scenario is pretty different as the property tours have shifted entirely online. This has strengthened the importance of developing a stable and reliable infrastructure. Some online platforms, like Apartments.com for example, have seen a more than 100 percent increase in rental traffic as a result of the sudden reliance on technology to run a successful real estate business. This kind of dramatic shift has clearly depicted a major impact on how people will decide where to rent property in the future.

Discounted Real Estate Deals

The volatile trends of real estate markets may last till the end of 2020 or beyond (Moody’s Analytics). The biggest challenge in the US realty sector during these times is to estimate the “right price of an asset”. However, certain companies are finding ways to leverage and capitalize on off market deals. Achieving such deals isn’t an easy feat, as it needs a stable capital position and strong networking connections with various lenders and brokers.

In some cases, these deals are being offered with a 15%, or a more percent discount. Since not all new opportunities will be that lucrative, so one has to have a proper understanding of the current changes in the realty sector. Anyone who is willing to invest and wait for the market to return can earn a much greater ROI than ever before.

These lucrative opportunities can be expected to persist throughout the rest of 2020, regardless of when things will get back to normal. Based on the current situation, lending will remain tight in certain cases, the borrowing terms might be more stringent than usual and also, ease of accessing capital will be more expensive.

“Precaution is better than negligence” which is as similar to

“Prevention is better than cure”

Not matter how long the battle is, we still need to have a hope . The future might be unknown. We still have a long road ahead. But if we can continue being proactive, vigilant, take precautions, & look for new possibilities, we might reach the end of the road. Bypassing the dark tunnel of misery to a newly progressive future ahead.
prashant kumar

Prashant Kumar, CCIM

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