As a potential investor, it takes careful deliberation and assessment before you purchase an Investment. You must consider different factors, such as how the investment would affect your personal or company’s assets in the long run and how it would benefit your needs. Caution is even more magnified during an unprecedented global health crisis.
However, real Estate professionals believe that it is an astute decision to invest in real estate property during the COVID-19 pandemic. Like fine wine, a real estate investment ages better over time—the value of real estate increases as years pass by, which will help you build your wealth one-step ahead compared to other investments. There is no high risk that the value will depreciate gradually.
The Real Estate Industry as a Resilient Sector
At a time like this, what’s next for properties? Can investing in residential and commercial properties endure amid the crisis? Apparently, yes. The real estate industry is a resilient sector and can bounce back from any obstacles.
Prof. Enrique Soriano III, Executive Director of the Wong + Bernstein Advisory Group, says that the real estate sector covers more than 6 million housing units in the Philippines based on real demand.
“Managing the risk as a result of the current uncertainty is the only hurdle for property players to overcome,” he says.
Meanwhile, a February 2020 report by Cushman & Wakefield revealed that commercial real estate properties are the most resilient, mainly due to the long-term characteristic of these properties to regain losses sooner or later. For instance, as the ecommerce sector booms in an era of online shopping, there is also an increasing demand for distribution centers and warehouses.
Investing in Real Estate in the New Normal
What about residential units? Is it wise to purchase a residential unit amid COVID-19? This article lists down five reasons why investing in real estate as a homeowner is a smart move during the pandemic and how it can help you build emotional and financial wealth.
- You can negotiate for better prices. With quarantine set in place, money usually spent in leisurely activities has been reallocated to grocery goods, utility bills payment, and medical care. This means that most people spend money only on necessities.
With this additional money, potential buyers can now explore more real estate options, discuss them with a real Estate Broker, and negotiate for a better price. Colliers Philippines explains that pre-selling and secondary projects are the best for negotiation because sellers will probably be flexible in terms of payment and pricing during crises.
- You can choose from a wide array of options. Since the pandemic, online listings have increased, as real estate brokers have been maximizing the internet to reach potential buyers. The advantage is that potential buyers can check out a house or apartment even during a lockdown and contact the real estate broker immediately.
With that in mind, the accessibility of available housing units means that you can pick from a broad scope of choices, depending on your needs and wants. Consider the reason why you are making the purchase.
For instance, most people who move to the city and live in apartment condominiums do it because of work. Homeowners can stumble upon houses and lots that are within their budget. Meanwhile, potential investors can discover a suitable property located within a central business district, which may be in demand.
- You can enlist the expertise of a real estate broker. If you’re unsure about which property to buy, now is the best time to maximize a real estate agent's knowledge and talk about your preferences within a specific budget range. Chances are, they can give you insightful advice regarding taking an investment during this period of uncertainty.
It is possible to meet a real estate broker who had the first-hand experience of a global financial crisis, such as the global financial crisis of 2008, which most industry leaders today have gone through. These experts can help you be prudent in your decisions.
- You can pass on your real estate property to your children and grandchildren. These days, the legacy we leave behind is just as valuable as the wealth we accumulate. That is why now is a good time to plan real estate property inheritance for your children and grandchildren.
There are countless stories of Filipino families discovering that they have a property somewhere in the province, which is valuable for their kin. A long-term investment for your family is worthwhile because it offers security, safety, and shelter for your loved ones.
Most units nestled within the city are within the vicinity of prestigious schools and universities, so it takes into account the future of your children.
- You can diversify your portfolio. Since the real estate industry covers both residential and commercial, it’s best to diversify your portfolio by including both properties in your assets. This will help you minimize risks.
Industrial and commercial properties can be used for the demand for warehouses and safe office spaces, respectively. You can also diversify the location of your properties. In the Philippines, there are several rising infrastructure developments in Cebu, CALABARZON, and North Luzon. It will contribute to national economic growth.
Planning for the Future amidst a Crisis
Before deciding on any investment, remember to consider the risks and rewards. A long-term real estate investment not only boosts your wealth in the present, but it can also provide a stable and secure future for your family. It is a lasting legacy that will endure the test of time.
Marla Mendoza is the Marketing Manager of Filigree. She has been handling the marketing and communication initiatives for the high end brand of Filinvest Alabang Inc. Prior to managing the brand, she was in charge of focused residential and township developments. Marla has been in the marketing industry for over 10 years both in the hospitality and real estate industry.