Many commercial real estate owners have had to close down or sell their assets during the Covid-19 coronavirus pandemic. As they undergo a period of recovery, they have to reopen their doors and think of new ways to sell to the public. There are various solutions available to help business and property owners as they regain strength after a pandemic.
Put Safety First
In the final days of a pandemic, a commercial building owner needs to put the safety of customers first. This means promoting a cleaner, more sterilized environment for all managers, employees and visitors.
Put the Customers’ Needs First
Every customer’s needs and interests change during a pandemic. Most people focus on buying the necessities first along with the items they want to enjoy. It is recommended that sellers find out the bestselling products in the markets at the moment and reprioritize the products that they are selling in their stores.
Keep Up to Date With the News
The news informs everyone about the state of the pandemic in the local community and in the greater nation. Most importantly, business owners need to know the status of local infection rates and the guidelines that politicians are recommending. Their greatest chance at recovery lies in staying informed and relevant to today’s issues.
Choose Traditional vs. Digital Methods
During the pandemic, many business owners transitioned to virtual settings. They took on more digital marketing methods to reach out to clients online and over the phone. As the health crisis is ending, more companies are returning to their physical offices and buildings. It’s necessary to know which businesses, workers and services will return to their previous states and which ones will remain virtual.
Every business’s marketing campaign should be improved and resumed as it was before the crisis began. This means learning how to market again but to a changed audience. Every marketing campaign needs improving to meet the newest, latest demands in the market.
The commercial real estate industry has never remained stable under any condition. But during the recovery period of a pandemic, most consumers are eager to start buying again, and that includes buying business property. Business owners have many opportunities to recover and bounce back from this temporary downtime.
For any Millenials considering or even beginning to scope the real estate world, you’re on the right track. Real estate investing is one of the smartest moves anyone could make, considering the versatility and potential returns. Investing in property comes with neat benefits like passive income, tax benefits, and full control over not only the property and your investment strategy but also your profits.
That being said, deciding to invest in property can be super daunting. Where do you start? What do you do with the property?
To nudge you in the right direction, here are some essential things that Millenial real estate investors should know before jumping in.
Know your budget and credit score
While it’s not necessary to be wealthy to invest in real estate, having some savings will help buffer any risks from investing or at least reduce the uncertainty.
Establish a financial goal and investment strategy
Know your goals and the best plan to get there. Generally, most investors don’t need to pay for an entire, say $250,000 property. This is for the Millenials who are still struggling to pay off school debt: don’t worry, you can invest as well. The cool thing about real estate investing is you can purchase most properties with a down payment, which tends to about 20% of the total price. Options like getting a bank loan or lending from a trusted partner are also helpful for millennial real estate investors with limited cash at their disposal.
Scope the market
Knowing where to look for viable property options requires looking at patterns like population growth, rental demand, and job availability.
Consider the type of property.
Here, you have a few choices at your disposal. The top types of real estate include single or multi-family properties, syndications, or buy & hold turnkey funds. Single or multi-family properties are in high demand and involves a short-term strategy. Syndications are larger, commercial properties with a group of investors, resulting in less risk. Turnkey real estate funds are longer-term investments that offer immediate passive income from tenants already living there.
When you know the type of property you’re looking for, it’s time to take a look at locations you’ve identified based on the real estate market. With your budget in mind, figure out if you want to flip a house or if you’d rather be a long-distance landlord for a turnkey property.
Above all, millennial real estate investors must continue learning and growing. While the first step is to try it out without hesitation, further education will make Millenials savvier in their real estate journey.
The most popular choice among real estate investors, the single-family house, is well understood and profitable. Even in a market prone to recession, many people prefer single-family homes over condominiums, duplexes, or triplexes when it comes to investing. However, not everyone is delighted at the idea and wants to follow that route. Some investors may consider investing in multi-family units. And multi-family dwellings, especially with fewer units, tend to increase the value that matches closely with single-family homes, and their cash flow is a lot better compared to single-tenant dwellings.
This information talks about the details of finding a multi-family property and offers insight on why it can be a pleasing alternative.
Location, Location, Location
Location is of absolute importance in determining the value of a multi-family property. When the neighborhood has well-maintained lawns, quality homes, clean sidewalks, and proper signaling at intersections, it’s easier to find tenants. If there is construction activity in the neighborhood, it’s a sign of growing demand. On the flip side, if crime is on the rise in a particular area, people want to move away, reducing the neighborhood’s overall value. A change in zoning from residential to mixed-commercial use can result in a significant price reduction.
What is Inside Matters
The physical condition of the property, age, and structural stability have a noticeable effect on property value. The choice of paint color, cabinets, countertops, and flooring material matters too. The more bizarre the upgrades, the more likely that it’ll lose its market value. Likewise, the quality of craft, both in terms of original construction and recent upgrades, should be considered before purchasing a multi-family property.
Hiring a Real Estate Agent
A real estate agent can help find a multi-family property unless you insist on doing it yourself. With an agent’s assistance, you can easily wade through many unique situations, questions, and doubts that are usually not encountered in a typical single-family home buying. For example, your loan interest rate and type of purchase ( residential or commercial ) will depend on whether you are buying a duplex or an apartment with five or more units. Should you hire an accountant as well? Probably yes, if the number of units and complexity of your overall tax situation increase.
Homeowners often buy and sell their property. The most important aspect of a house listing is to be seen by as many people as possible to increase a sale’s chances. Despite a general market saturation in the housing sector, it is possible to achieve a higher listing and to reach a wider audience with a few tips and tricks as outlined below.
Invest in SEO Marketing
Search Engine Optimization is a tool that, when used properly, gives homeowners a competitive edge when it comes to online searches increasing home showings. The house listing is prioritized through specific keyword searches. It is advisable to have several long keyword phrases that include the general scenery where the house is located.
Make use of a Lockbox.
A lockbox is becoming one of the avenues that are giving homeowners a competitive edge. It allows the agent to show the house to house hunting individuals even when you are not home. It should ideally be located close to the house so that the agent can have easy access to it while you are away.
Host an Open House Event
One way to pull in the masses to a house showing is to host an open house event. Employing channels such as social media, the local newspaper, and website listings will attract many interested buyers locally. During the event, it is crucial to keep the guests entertained by serving snacks, having brightly lit balloons and banners, and having a magician or clown entertain them.
Offer Time-bound Deals
Proposing a good deal that runs out in a limited time is another way to get people looking into the property. Scarcity induces demand. Since everybody wants a good deal, they will be more motivated to purchase soon if the offer is only on for a limited time.
Any homeowner’s goal is to make the most amount of money they can from selling the property. However, sometimes pricing it at the higher points doesn’t work in favor of the home seller. Having a competitively priced house allows buyers to get it at the listing type’s estimated market value.
A combination of the above tips gives a home seller a competitive advantage, and the client handling the sale of the house can have a much smoother time as they coordinate the sale on behalf of the homeowner.
An essential skill in making a house flipping profit in the real estate business is knowing how to value a house properly. For individuals who are in the industry to make profits from low purchases. Here are ways to determine worthy homes to flip.
Average Value Determination: The house post-rehab value is determined by considering the cost of the houses in the general vicinity and the price of recently sold homes similar to the post-rehab vision. The final worth after repairs is the value you use for determining the worth of the house.
Standard cosmetic rehab: A general rule to estimate repair costs is $20 for every square foot. Based on this assumption, adjustments can be made upwards or downwards depending on the individual house’s specifications. This value will help determine whether to select the house for flipping.
Transactional expenses: Purchase closing costs are usually paid by the seller and account for 0.5 percent of the purchase price. The selling closing costs range between 1-6 percent, with an additional 1 percent as attorney fees. Holding costs such as property taxes, insurance, utilities, and maintenance costs should also be considered.
Offer price-setting- There are formulas to determine what offer price will be stated. One way is to get 70 percent of the average repair value deducting the repair costs. Another way is to subtract the repair costs, closing and holding expenses, and desired profit from the ARV to get the right offer price.
Geographical setting: Proximity to facilities such as shopping malls, transportation services, and school increases the property’s value while highways and airports decrease it. Different locales may have various school taxes, municipal and private trash collection companies with different days.
Physical attributes: As much as the seller wants the house to stand out, it shouldn’t be so significantly marked up in features that it overshadows the neighboring houses. It will only lead to a scenario where it will be too costly for that neighborhood. The most successful house flips are those that have the most work. However, if structural issues are suspected, it would be wiser to buy a house in better condition.
Lenders- Rehab lenders give between 65-70 percent of the ARV. This factor is because an investment is made with the anticipation of making money in the end. If the lender advises otherwise, then there will not be enough equity for the investing party to make money in the end.