In the last sixty days, hundreds of billions of dollars have been lost in the stock market. From Apple to Google, the world’s biggest brands have been hit critically in the light of what looks like another global economic recession. Many schools in the USA have been closed down for the moment. Italy is practically on quarantine mode. Almost every major soccer event in all of Europe has been halted until further notice. Flights to certain destinations have all been restricted for now.
Several industries have taken a huge hit and a good number of companies will be folding up operations soon or already. Hoteliers in Italy, China and worst hit countries are seeing red in their businesses. It is almost the same for anyone whose business booms where people gather – people-based businesses so to say.
And the Corona Virus Disease – aptly named COVID-19 – is the unlikely culprit in all of this trouble. Until the stock market crash of 2007/2008, nothing else has hit the world’s economy this hard. Back then, many businesses closed their doors permanently and in huge numbers. Real estate was in shambles as properties were practically sold way too cheap as fear gripped everyone. It was a financial Armageddon. But the world recovered. Almost a dozen years later, we’re back to where we once were.
How Does This Affect Buying of Properties?
The most obvious implication of this situation is that many real estate experts will record low sales for their properties. Those who own properties that are currently being let out in COVID-19 worst hit cities will definitely expect pretty low returns. The reason is simple. Most of their tenants will be indoors and be unable to work and pay up their rent especially the ones who pay their rent monthly but who don’t get paid salaries this period as they don’t get to go to work.
This will reduce the earnings of these property owners drastically. The ones who are unable to break even will naturally start selling their property. This is when brilliant investors who have extra cash can cash in. You can start anywhere. There are houses for sale in Truro, flats to let in Manchester and land for lease in Milan. Whatever your desired destination might be, this may be a good time to acquire a new property if you have the cash to spare.
It is true that the world’s economy is currently shaking and many industries are already hit. But here’s something about money that you might want to note. It is hardly ever created even when it seems so. Money – just like energy – is neither created nor destroyed but transformed from one form to another. In this case, from one industry to another or from one product to another service. The logic is simple. When it comes to money, one party’s loss is another party’s gain.
In the end, this may not be the best time for property owners to sell property as profit margin will be minimal if any. It is however a great time to buy as prices will be at an incredible low. The world will recover, faster than expected. For opportunistic investor, this global challenge still shows a bright light of hope and opportunity.