If you are looking to protect your savings in a safe way, a real estate property will always be the best option, considering that it is a material asset that in most cases does not suffer a significant drop in the value determined at the time of purchase, and it is even viable that over time its value will increase, taking into account its price and location.
From a general overview, the covid-19 pandemic has caused disruptions in many aspects of society, mainly in health and economics, where many countries have taken measures to cope with the damage caused by the pandemic.
The situation was so drastic that it caused the devaluation of several currencies, a fall in the price of oil, many businesses closed or with a decrease in sales, a fall in the demand for investments, among other extremely negative aspects, which makes us think intelligently, and look for something safe to invest in, and without a doubt the safe bet is real estate investment.
It is said that a real estate property is one of the most solid assets to make an investment, mainly based on its location, the value it had in its construction, its commercial value and of course its profitability.
Points to Consider
At the time when the pandemic started, there was a drastic decrease in the number of properties for sale, but even so, under the crisis control measures, supply increased and the real estate sector was forced not only to reactivate itself but also to renew itself in order to adjust to the needs of the market, where the following aspects were considered:
The basis of every investment is fixed in personal finances, it is important to establish the indicators that determine whether it is the right time to buy a property.
Price Reduction
One of the immediate effects was the increase in real estate supply, in terms of lower prices, which can be beneficial to start investing. The adaptability of the spaces contributed significantly to the reduction of prices, even so, it is estimated that prices did not decrease, but were maintained, and it is estimated that this process will continue until the end of the second half of 2021.
Interest Rate Reduction
The pandemic has led to lower interest rates on mortgage loans, and although this process has made banks more restrictive in the loan approval process, it is important to consider that, in the medium term, interest rates do not seem likely to rise, which may be a good factor to invest in.
Good Negotiation
Another important aspect is the ability to negotiate, due to the increase in supply, the negotiation of terms, monthly amounts and down payments between real estate brokers and buyers can benefit. It is important to make agreements on price and extra benefits.
Capital gains
The increase in the value of a property is mainly considered by its location, available services, level of accessibility and development of the area. The pandemic created a good opportunity for people who wish to invest in real estate, as they will now have a higher appreciation in value than if the pandemic had not occurred.
Pre-sales offer
They are considered to be key investments, especially post-pandemic, because the investment prices are often lower than when the construction is completed, which in turn guarantees a higher capital gain.
What to Look For When Investing
When investing in real estate, the key post-pandemic is to monitor variables such as exchange rates, inflation, interest rates and risk metrics; this will allow you to define what the scenario is for each phase in the short, medium and long term.
It takes into account risk and return estimation in order to diversify investment options and analyse which one suits your investment profile.
It is advisable that before formalising your investment, you review the contract, check that it is up to date, that the terms and conditions are clearly established in order to avoid legal problems, and also check that it is a recognised and reputable developer or construction company.
There are different types of investments, e.g. buildings, condominiums for housing, offices or even housing areas, hotels, schools, etc. The type of return to be obtained and the capital gain that can be generated will depend on this.
As to when you will see returns on investment, it is important to consider that once the economy consolidates and the local cycle of each real estate market becomes active, the capital appreciation of each asset will capitalise and increase the liquidity of these assets back to normal.
