Monday, March 1, 2021

Real Estate, a provident investment amidst the pandemic


Image courtesy of Pueblo de Oro

We are living in an extraordinary time. We are facing a global pandemic and a global economic downturn at the same time. We feel a lot of uncertainties about our current situation and our future. We want to secure our finances and most of us think that in this time of crisis, investing might not be a wise move. But do you know that this is the time we need more emergency funds because our health is the one at risk due to an invisible enemy? And to have more emergency funds, we need to save more and invest more for our future. 

In this time of a pandemic and a very volatile economy at the same time, buying real estate property is still considered as one of the most important and provident financial investments one can make. Yes, experts in the field have proven that it is still wise to invest on real estate.

Global markets went into turmoil at the start of the COVID19 infection but surprisingly, the property market has remained resilient. In United Kingdom, property market maintains its stability despite outbreak and the new lockdowns as house prices have grown by nearly 6%, with the average price for a house being £227,826 and the price growth per month is 0.8%. 

Image courtesy of Financial Express

In the United States, 35% of Americans still choose the real estate as their top investment, ahead of stocks and bonds at 21% and savings accounts at 17%. The said figures are enough for financial experts to agree that this downturn will not hurt real estate in the same way it did in the 2008 global financial crisis.

In a bid to stimulate global economies, interest rates were slashed, the cost of borrowing has become cheaper and mortgages become more affordable for those with adequate finances. These are some of the reasons why investing in real estate is still a smart move amidst the outbreak.

When investing in real estate, it is important that you have a tool to compare house prices versus the fluctuating interest rates and the different loan terms. It can be done using the free online mortgage calculator. It comes in handy whenever and wherever you are. 

Image courtesy of Provident Law

The calculator is easy to use as you only have to provide the Home Value, Down Payment, Mortgage Amount, Interest Rate and Term in Years. The calculator will automatically compute the Full Monthly Payment, Interest Only, Months (Loan Term), Total Interest Payable, Total Loan Payments and the Total Cost. This online tool clearly shows you a scenario of what you are investing into. It also gives you the idea of the accurate values that you might need in the future for your investment.

Real estate is one great source of a passive income via rental payments. Commercial real estate which poses the biggest risk for investors as its market has fallen into almost 28% because of the pandemic, is slowly recovering as economies start to open and with the inoculation of vaccines in different parts of the globe. The best investment opportunities are in the places where the labor market is the least damaged so if you’re in a position to invest, you have to grab the opportunity now.

Real estate investment has long-term potential and a strong fundamentals which makes it a better source of income and as a portfolio diversifier. It is indeed a provident investment but as the nature of the coronavirus pandemic remains uncertain you should look into the specifics of the local and national market of the city in which you’re looking to invest.

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