Ask a property investor who wants to grow a property portfolio at a time like this for a list of their biggest challenges, and you’ll invariably hear many of the same answers repeated. The real estate industry is getting bumpier and bumpier. COVID, shifting political climates, volatile markets, rising mortgage rates, and evolving technology trends are just some of the challenges property investors are facing everywhere.
Today we will focus on some of the critical challenges property investors have today and logical solutions to address them.
Whether you are new or seasoned - you will certainly relate to the below challenges during this pandemic and erratic property market shifts.
1. Land scarcity and longer build times due to high demand
It’s pretty simple: with high demand comes scarcity of supply. There’s just been an influx of property sales since the pandemic started. Finding listings in a low-inventory market has become a challenge even for seasoned property investors.
There are also new entrants in the market such as 1st-time investors and new home buyers who want to take advantage of the price and bank rates. A lot have been taking interest in the property market now compared to buying and building a retail or food business.
There is also no doubt that build times are taking longer to complete due to the lack of materials and manpower brought about by lockdowns and restrictions. It is due to the fact that there has never been this amount of property sales over the past quarters in the last 20 years. There are just so many properties being built and are lined up to be built in the next coming months to come.
What to do: Have a realistic expectation and work with an agency that could source the most logical property investment
It is hard to source viable properties - that’s a given, but with the current trend - it has become even harder. Working with a property consultant can give you not just an overview of what’s to expect but also where, and what property to put your money into.
There’s a difference between going over listings and googling stuff yourself and talking to someone who’s got a stocklist on his hand with a 20-year investment calculation to ponder on.
2. Adapting To Technology Trends
Since the pandemic started - everything has transformed digitally and we are all forced to adapt to remote property investing technology. The traditional property viewing, presentation, and discussions have now become an ultimate Zoom Meeting Appointment.
With the advancement of technology, more tools and information are available across all platforms. Property can be viewed using 3D, augmented realities, and via virtual tours.
Discussion and signing are all via software and apps that can be accessed, signed, and reviewed even on just any mobile device. COVID - 19 has brought about an unconventional way of buying properties that need not be viewed on-site and in the comfort of buyers’ homes.
What to do: Adapt, educate yourself, and work with a credible agency
With this shift, engaging consultants and professionals have become the core of purchasing properties off-site and remotely. Buyers are educated and well-informed now more than ever.
There are still pros and cons but the key is to be able to work with people who can gear you towards the right decisions. Educate yourself and gather all the data and information you can get. Do all the double checks until you are 100% certain all is good to sign off on.
3. Erratic price increase
We now know that property prices are soaring across major cities and along Australia’s East Coast. Economists in Sydney alone predicted a 19% rise in 2021.
Prices change in as little as 7 days and can go up 20K to 30K from the time it was last published. Today, overthinking can sometimes lead to lost opportunities. We have had a lot of buyers who ended up buying 30K more than the 1st published price when they 1st enquired. This is not to blame investors for thinking and considering all possibilities at play before making a decision. But sadly, with the demand - this is what’s happening now.
What to do: Scout regional and interstate areas
With the current trend of city prices at an all-time high, savvy investors are scouting regional and interstate areas where properties are still affordable but still promises higher returns and capital growth.
Buying in regional areas close to major cities has been happening for quite a while now, but due to the pandemic - it has greatly increased with no signs of stopping anytime soon.