PATIENCE, AND TRAINING HARD
How can we keep it real, but not lose hope and faith that this too shall pass? While many people are sheltering in place and waiting it out, some of us are actively preparing for the recovery. It’s a little like training for a sports event, or learning a new activity like a martial art.
There is an old TV series called Kung Fu (even before Karate Kid), that was about the training of a young man in martial arts. One of the wise teacher’s sayings was, “patience grasshopper;” no one simply becomes an expert overnight. How very appropriate in today’s world of instant gratification. COVID has many lessons to teach us about patience!
We certainly hope that this will be the largest economic disruption (aka chaos) in our lifetimes. This week in the news: Canada’s Q1 GDP was -8.2% (StatsCan) and now the banks are all reporting their losses. Also, this week I heard a fabulous quote from Gary Mauris that sums it all up: “the Canadian economy is in a medically-induced financial coma.”
But we KNOW this will not last forever. How can we actively prepare for the recovery phase? We want to be ready, willing and able when the opportunities arise.
Well, what are some of the emerging trends for real estate in general, for real estate investors, and for rental housing providers? Clearly home office space has become a priority—and for many people that will include a door that can shut and maybe even lock (parents will understand!). Also, for the next 6 months or so, there will be less university/college students for those rentals, less immigration until the health and safety of all can be better managed, and less short-term rentals (due to fewer international travelers, fewer sporting events—professional and amateur, and much less business travel due to our infatuation with Zoom calls).
Ironically, at least for the short term, access to transit is not as big a priority as it once was. Many people are still afraid of the crowds on buses and other forms of public transit. This means that parking is currently a very valuable quality for your rental properties. Hint, hint: you have time now to build that garage and add value for your tenants before winter in Alberta.
Also, rather suddenly, people are realizing they can live farther away from the city centres. Big companies are adopting work-from-home policies and strategies that will allow more families to live comfortably in the suburbs. First-time homebuyers are adopting a philosophy of “drive until you qualify.” Real estate investors can adopt a similar philosophy of “drive until you cashflow.”
We are mindful of all of these emerging trends as we create our plans to move forward into recovery—because it’s not all bad news. Have you seen those interest rates!?! People who are already well positioned are taking quick action on some amazing deals. We are anticipating more deals throughout 2020.
Yes, things are largely still in limbo for now—but we are actively training our minds, finances and strategies to be ready as the economy opens up more and more. We find it ironic that 2020 was supposed to be an Olympic year—how many times have we all heard “record-breaking year” used in a sentence? Like the young martial arts student, or like the Olympic athletes in training, we are patiently preparing for our upcoming events.
