Real estate investors look to cash in on COVID-19 opportunities

Investors with money to spare are preparing to take advantage of new opportunities in the housing market that have emerged as a result of the COVID-19 pandemic. While housing stock in many areas remains critically low, investors still see potential growth areas and opportunities for home flipping and rentals.

For one thing, some investors say that people who’re holed up in their homes may start to feel as if their current property is somehow inadequate. As such, many see house flips as a potentially lucrative opportunity going forward. House flips tends to be vacant for showings, which is a big advantage in today’s current social distancing climate. And so investors are targeting the lower-end of the market.

In addition, the rental market presents another opportunity, investors say.

“Between the low stock and the decreased amount of churn, investing in rentals right now would be a smart idea, especially since the federal stimulus and unemployment packages should allow some people affected by the crisis to continue to pay rent,” said Christopher Long in a column for Forbes. “Whether you decide to flip properties or rent them, between the depleted stock and the number of institutions exiting the market, the current unfortunate situation does present an opportunity for real estate investors.”

Investors are also seeing opportunities in the single-family rental market for long-term growth.

While housing rental defaults and tenants not paying rent will likely hit the sector initially hard, the low supply of newly built rental homes in many markets could help it recover earlier than other residential real estate asset classes, notes a report from John Burns Real Estate Consulting. Also, as more people’s employment situation changes, they may turn to other forms of temporary housing, like rentals.