Mistakes To Avoid While Investing Through A Pandemic

Even though things seem different during this time, there’s no reason not to continue to invest. The best way we can adapt is to take the time to learn along the way. Here are some mistakes I’ve seen some people making.

Lowering Rents

I understand the logic behind lowering rents makes sense to keep on attracting tenants, but now as things began to balance there’s no real reason to lower the rents. It was a strategy to avoid high vacancy rates during the beginning of the pandemic. Occupancy rates are stabilizing at 95% on average, with little exceptions. Lowering rents means giving up income. 

Putting a Halt on Renovations

As soon as the pandemic hit, investors began to worry if their tenants would be able to pay rent. So they stopped renovations to focus on keeping units full, which prevents increase of rents. Instead of putting a halt on renovations, decided to adjust to the business plan of renovation on demand. An average of 70% of tenants are willing to pay a 10%-30% increase for renovated units. Which in the long run will make you more money. 

Unrealistic Expectations

Since COVID-19 has hit, things have changed. You cannot expect the same returns now as you saw before COVID. The market is unpredictable at this point, but we can assume rents won’t grow as much as we predicted. You may see some great deals out there, just be careful for unrealistic projections. 

Letting Emotions Cloud Your Judgement

There’s two types of emotions investors face, one, fear that prevents them from buying additional properties, and two motivating them to take unnecessary risks. Which is why you must keep emotions out of the calculation entirely. You must realize real estate is a transaction, the numbers must justify making the purchase.

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