With the Coronoavirus (Covid-19) garnering headlines in regards to the financial markets all across the world, I thought now may be a good time to for a reminder about the relative security of real estate investing as part of your investment portfolio. While all around you there is panic, feel free to rest peacefully.
Look, there are no certainties in any kind of investments. Like most of the readers here, I too own rental property. I too invest in stocks, bonds and mutual funds. And, I too have watched approximately 11% of my investments in said stocks, bonds and mutual funds simply evaporate in the last week.
Yet, my real estate stays steady At least for the time being.
Most our income property investors here at Kansas City’s Ad Astra Realty are buying rental properties within the bell-curve of income for their respective states, Kansas and/or Missouri. As such, you need to know that demand is still incredibly high on the buy side. There are simply far more buyers than sellers at nearly any price below $250,000 in Kansas and $200,000 in Missouri. Vacancy for rental properties is hovering right around 5% in Missouri and 3.5-4.0% in Kansas for most price ranges.
Will Covid-19 change that? I doubt it. Not because I buy, sell and manage real estate, but because when all the hysteria is peeled back, Covid-19 isn’t as damaging as pneumonia or the flu. There are numerous stats about this.
UPDATE: This released by WHO on March 4, 2020.
As an aside, I am a believer that one day we will have a virus that we simply have difficulty combating. This may be a progression to that. I concede. Yet, it would appear to me that any disruptions to the housing market will be slow to come and short lived. In fact, if the Fed’s reaction to this is to slash interest rates further, it could be a boon for the home buyers and investors.
There is no doubt real estate investments carry risk. Being knowledgeable about those risks, hiring good help and having good insurance should mitigate much of the exposure.
As always, feel free to reach out to us with any questions, thoughts or concerns. We are here to help you obtain and enjoy your “Retirement worth having.”