3 Things we learned from Investing During a Pandemic
When COVID-19 first hit South Africa in March, no one anticipated it causing a full-blown pandemic. However, we quickly realised how serious the disease was. After coming to terms with lockdown regulations, real estate experts had one glaring question: What is going to happen to the real estate industry?
Many predicted that the market would crash, others said that investors would lose money from tenants and that they wouldn’t be able to safely invest in property for months. Very few remained optimistic. However, the economy bounced back much quicker than anticipated and the real estate industry has been not only surviving, but thriving.
Average ROI, rental prices, purchase price, % of renters in the market and % of renters that pay on time have all either remained steady or improved in the past few months.
It’s clear that COVID-19 didn’t negatively impact the real estate industry as expected. But, what did we learn?
1. Life will go on
The past few months have been an incredibly scary, stressful and even grief-filled time for many people. I in no way want to minimise or negate that. However, South Africa’s recovery rate and state of the economy prove that life will go on. Many of us thought that the pandemic would cause a sharp decline in the purchase or rental of new property. That hasn't been the case. Nothing can stop the world from turning. People still need somewhere to live. This is not the first or last crisis our country has endured. When the next one hits- and it will- remember this.
2. Diversify your investment portfolio
Diversification of your investment portfolio has always been crucial. However, during a pandemic, it’s even more important to not put all of your eggs in one basket. The best ways to diversify your portfolio include having a mix of commercial, multi-let and student accomodation properties, as well as investing in different areas and in properties with different levels of risk.
3. Stay ready, don’t get ready
Readily-available technology and data have been the saving grace of many investors during this time. I myself have found TPN’s online tenant monitoring system and property analytics portal extremely helpful. However, those who were already familiar with recent PropTech tools were able to adjust quicker and thus had a faster recovery rate.
At the end of September, I hosted the largest Virtual Real Estate Summit ever with 10+ real estate and PropTech experts. We discussed how to close deals, how to find investors, structuring and growing your portfolio, our 2020 rental market predictions and how to digitalise your real estate business.
Did you miss the Summit? I have good news: you can still get access to the information-packed sessions. Book an Advanced Pass for 12-month access and a Premium Pass for lifetime access! This deal is only available until the end of October!