Last week, on an online REC Brunch, we discussed the current state of the market. Many are concerned over COVID-19 and how this will influence their investments. Here's a recap of what was discussed in our event.
Now is a very important time to be proactive. Stay up to date on the news to diminish any concerns you may have. Getting educated is the key to feeling secure.
Values in real estate did not go down. It's not like stocks, where the market and can rise in fall in a day. It will take a while for an impact to be made apparent. It's only ever a loss if you sell, the market will inevitably rise if it does fall.
We would advise against selling now if you can. Only sell if that's your only option, it would be a mistake unless you must. If you're looking to buy, only do so if you're financially comfortable. If you don't have steady income and a healthy amount of liquid cash just wait. We advise to hold off buying and selling for the next few months, especially if you don't have liquid cash. We still anticipate an appreciation of 3.5 - 4% in the Greater Toronto Area, which is lower than what we usually see. The Alberta market was hit, but that is an outlier compared to the rest of the country.
If you plan on buying a rental property now ensure that it has a rental guarantee as well as a deferred down payment structure. There won't be any pre-construction launches for the next while, we will likely be seeing virtual launches in the coming months. If a project has gone bankrupt you will receive the entirety of your money back, but it's also likely that another developer will pick it up.
If you've purchased pre-construction and money is tight, don't be afraid to ask for an extension. The builder will likely not cash the cheque if you ask. Ask for more time than you need if you are negotiating, this will probably net you more time or give you the exact time you were trying to get.
Ensure that you stay in contact with your tenants. The vast majority of people were able to pay their rent last month, but that could alter depending on how long this continues. Now is a good time to be lenient with them, not everyone has the same financial comfort.
If money is an issue right now, look at your short-term expenses. You can probably trim what's unnecessary. With any recession priorities need to turn into your main focus. There are still opportunities everywhere, and not just in real estate. Success is still out there, it might just be a little harder to find.
Blend and extend mortgages have been what many are utilizing in commercial real estate right now. This is when you mix your current mortgage rate with what your lender is offering as of now for a new rate; your lender will then extend your term. This will likely continue for the following three months.