More people than ever are asking themselves, “Is now the right time to invest in real estate?” Historically, economic recessions are an ideal time to purchase property if you have the means to do so. However, this pandemic recession is unique in that we do not know how long it will last, and we can’t be certain what types of properties will be profitable now or in the future. In the past few weeks, we have explored the changing landscape of Retail, Office and Industrial spaces, and we learned that it may be difficult to predict the lasting effects this particular recession will result in. With booming e-commerce and a large amount of the population successfully working from home, buying an investment property, particularly rental properties, may have special considerations: rent rolls, short term leasing, and tenant safety.
The Future of CRE: Investment
At this time, price fluctuations can make investing right now seem risky. Many savvy investors have their eyes on distressed properties that will likely be profitable once the economy normalizes. These investors should be cognizant of getting accurate rent rolls, which is the current register of rent for an income-producing asset. If current tenants are unable to pay the rent, how profitable will the building really be?
Current investors who are trying to lease space should consider modifying their lease terms to make their assets more attractive now. Businesses who are looking for new rental properties now are also facing uncertainty in the market. They are looking for short term lease options or the ability to sublease. To help these small businesses cut costs, Investors should partner with a Telecom Concierge, who can provide free business consulting and bill analysis to help tenants save hundreds on over-head phone and internet expenses. Additionally, savvy investors will look ahead to government assistance opportunities specifically designed to help the small businesses who rent these units.
Investors who are shopping for new properties should instead consider focusing on capital expenditures on existing properties to enhance tenant experiences, such as installing Wi-Fi-enabled security systems and keyless entry systems. This may be the time to Go Smart by upgrading your building to have automated sensors on utilities. These upgrades could enhance tenant safety as well as save investors lots of operating costs.
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