It’s been a long time coming, but some experts are cautiously optimistic that we’re finally entering an endemic period for the coronavirus. The reduction of face-covering rules in many regions is only one of the several signs that life has returned to normal — although it’s unquestionably a new normal.
Office, retail, and leisure businesses were among those that suffered the most from the epidemic. Signs of recovery are visible, although the stock market is currently experiencing a lot of ups and downs. It’s time to diversify your portfolio if it’s too much for you to handle.
There are some smart tactics that may pay off as we move into a post-pandemic real estate market, despite the fact that it entails its own set of risks. Here are four.
1. Add REITs to your portfolio
Real estate investment trusts (REITs) are a popular choice for investors who wish to diversify their portfolios without taking on the responsibility of being landlords. REITs invest in and operate properties in a range of industries, including healthcare, hospitality, and residential.
Following a pandemic, the data center and industrial REIT sectors will be important to monitor. The demand for data and networking solutions has grown especially as we’ve moved to remote and hybrid workforces. As a result, there is an increased need for warehouse and industrial space to store, manufacture, and transport all of the items we buy online.
Because client contracts are usually long term – some industrial leases will go for up to 25 years – and guarantee a continuous supply of income, both types of REITs have been labeled recession-proof. And because REITs are obligated to pay out 90% of their taxable income in dividends, those payments may accumulate significantly over time, depending on your investing method.
2. Rent out your vacation home
The airlines have lifted their in-air mask rules, allowing passengers greater freedom to move about the cabin. In fact, according to The New York Times, the World Travel & Tourism Council thinks that this year’s tourism in the United States will return to pre-pandemic levels, adding $2 trillion to the economy.
Want to profit from that windfall? At your vacation house, make a welcome mat for renters. Yes, you deserve some time off as well, but if you’re not going to use your vacation home all season, list it on VRBO or Airbnb for higher prices now that holiday plans are back in full swing.
3. Invest in multifamily real estate
Many would-be homebuyers have been deterred from purchasing a house because of high property values and rising interest rates. According to Apartment List, rents are up 17.1% year over year. Multifamily properties provide several sources of income due to the many tenants living under the same roof, whether it’s a two-family house or a multiunit apartment complex.
If you don’t have the cash to purchase a multifamily property, you might consider converting your primary house into one. Accessory dwelling units (ADUs) provide both an investment opportunity and a solution to the housing shortage by allowing you to convert your garage, basement, or backyard cottage into an apartment.
4. Sell your home while the market is still hot
The high demand for a limited housing supply has caused property values to soar. The median price for homes in the US is $375,300, an increase of 15% from year before, according to the National Association of Realtors (NAR).
If you’ve owned a house for a lengthy time and want to sell now, you’ll make a nice profit. However, if it’s your main home and you are looking to relocate, keep in mind that the majority of that gain may be lost when you buy a new house unless you are downsizing or relocating to an area with a lower cost of living.
In a post-COVID market, real estate investing provides lucrative possibilities for both landlords who want to run several properties and investors seeking to add REITs to their stock portfolio.