How has the Covid resurgence affected your thinking? If you think it hasn’t, you’re not being honest with yourself. Regardless of your stance on vaccinations, masks, the reality is that our lives have changed, and our real estate business has to adapt to these changes.
For one, and this has been agonizing for me, we can’t – or shouldn’t – be out in big gatherings. It’s 10 times harder meeting prospective partners in virtual conferences. I do miss the real ones.
Eviction moratoriums on a national level look like they are behind us unless congress takes it up, but many states including my own have their own restrictions. I’ve chosen not to invest my hard earned dollars where the vital role that owners and landlords play in providing affordable homes for families is not valued.
We’ve seen the dramatic upside opportunities of multifamily investing through work-from-home and work anywhere trends across the U.S., the spike in building costs reducing new product on the market, and the Fed’s ongoing focus on keeping interest rates low. Asset pricing may be through the roof but this is unquestionably a good time to be a buyer. The Covid resurgence is causing companies to give up any further plans to get employees back to the office. Certainly there is considerable downside to this trend but the impact to multifamily real estate is hugely positive.
Inflation? Count on it. But own hard assets like real estate. So when your property appreciates by 5% but inflation is 5%, did I make any money? Yes, because we’re leveraged. Your $1M property grew to $1.05M but you only put in $200K, and now your equity is $250K. You beat inflation. Downside is interest rates rise with inflation too. Nominal interest rates don’t even have to rise much for real interest rates to rise. It will kill your stock portfolio but not your real estate.