The Covid-19 has drastically affected the world’s economy in 2020 but with the vaccine availability this year, most countries expect to start recovering in 2021. For us ordinary people, it’s also a good time to look into investment opportunities that can help grow our income. While the financial markets still remain volatile, one sector that shows a positive outlook for 2021 is the real estate industry. Thus, buying a new house is something worth considering at this time.
There are two main reasons why people buy a new house in a middle of an economic crisis. One is to address the need for extra space due to work from home and online class set-up, another is to have an extra source of income or investment. Let us take a look at these reasons and the merits that come with them.
Buying a new house for the security of the family. Having one’s own home has helped provide security and stability for a lot of families during the quarantine. Homeowners had one less thing to worry about because they have a roof over their heads. There is also no need for them to worry about being displaced or evicted due to non-payment of rent.
Buying a new house to address family needs. Another realization that we had during the quarantine is the need for more space. We suddenly found ourselves needing an office for work-from-home and a room for my daughter’s online classes. This leaves us with an option to either renovate and expand or find a bigger house to fit our needs.
Buying a new house as an investment. Another reason to consider buying a new house now is the investment potential of buying a property in a middle of an economic crisis. Prices tend to be more negotiable when people are disposing of assets during a crisis. There are also more flexible loan options that can help you with financing concerns. However, just like any investment you’d have to know what you are doing to make a nice profit in real estate. You’d have to know the market, mortgage rates, and areas where real estate booms are expected post-Covid. Given that a home is a basic need for every family, investing in residential properties is a good place to start. BSP figures reflect growth of 27.1% in residential property prices year-on-year 2Q-2020 citing higher demand for high-end projects as one of the drivers.
There is no question about it, buying a new house is a good investment whether there is a crisis or none. For first-time home buyers, it provides you with the security of having a place of your own. For existing homeowners, it’s a good way to augment your income through rental property or buy and sell options. The question is, are you ready for it? Buying a house isn’t something that you decide on a whim. You have to prepare for it.
Your first consideration in property investment is financial readiness. Can you afford to buy a new house at this time? Check your liquidity and cash flow to assess how much you can afford to invest in a property. Aside from your actual cash assets, you may also want to check out financing options so you don’t miss out on a good property deal this year. Banks, financial institutions, and even government agencies have existing home loan programs that you can tap. It would also be prudent to do your homework in calculating mortgage affordability, amortizations, and rates & factor it in making your decision.
Another consideration is your readiness to take on the responsibilities of a property owner. Being a homeowner doesn’t end at transferring the title to your name and settling payments. You would have to take on the responsibility of taking care of the property and making it profitable in the case of investments. Brush up on the basics of home repair and maintenance and keep track of Real Property Tax schedules for your family home. If it’s going to be a rental property then you have to add the legal and business aspect of renting your property to the list of your responsibilities.
If you have no concerns with these considerations then it’s time to scout for residential properties to buy. Remember that price, size, location, and convenience are good metrics for buying a new house. You can actually shop for properties online because some realty companies have digital views of their model homes online. It would also help to have a professional real estate agent around to help you find the best deal for you. Don’t worry if you still need time to prepare, the important thing now is for you to be aware of your options. This way you’ll know what to do when the right investment opportunity presents itself.