With a new year ahead comes new challenges, especially considering the after-effects of the COVID crisis in 2020. But from the ashes of an old year come the possibilities and opportunities of a new one. Many consider that 2021 will be a year of upheavals, but with a clear mind and a focussed perspective, we can ensure that sensible business decisions are made based upon the predicted opportunities on the way:
Availability Of Money
Interest rates are at an all time low, and may even go lower, and into negative terms. This means that people with money will be looking at different ways of storing their wealth – ways that will give them a better return on their capital – and will be far more open to becoming angels investors.
An added benefit of this is now that banks will potentially be charging savers for holding their money, the rates of return you’ll need to offer to these angel investors will be much lower than years before, meaning more money for you.
The retail and hospitality sector has seen a huge negative impact as a result of the pandemic, meaning that many shops, stores and other businesses, are no longer operating. This means that many units, once occupied, are now standing empty, which could lead to incredible opportunities for developers.
With permitted development, we could see that many commercial units once seen as locked in place, could be granted permission to change their use and become residential.
Also, e-commerce businesses, which have seen a huge boost during the lockdown, now need premises in order to expand, adding further potential to the future of these now vacant commercial properties. Opportunities will be found in warehousing and industrial spaces, where asset-stripping and storage space could be the key to unlocking new revenue streams from e-commerce businesses looking to grow.
The stamp duty holiday has been extended to the end of June, and so has the furlough scheme, meaning that the property market is still very much thriving. People have money to spend, and with the government’s new extension of stamp duty, the property market could potentially still be a growth course throughout the summer.
Single-lets and Houses Of Multiple Occupation (HMOs) will continue to show strong demand on the rental side of things, which means that rent should increase, void periods should decrease, leaving landlords with a healthy supply of cash in the business.
Serviced accommodation (SA) properties have been hit hardest of all, as lockdown essentially means that people must stay at home, instead of travelling to other destinations, and making use of serviced accommodation properties. The “staycation” started and then was halted again. Workers have been forbidden to travel in most cases, and so contract-lets for SA properties have dried up.
Investors whose portfolios are made up mostly of SA properties will find this year the toughest, but those with a more diverse portfolio, including other investment types, should fare much better. This demonstrates the importance of diversifying our property interests, and not relying solely on one strategy.
the demand for serviced accommodation properties should begin to surge from the summer onwards, due to the pent up demand for leisure and holidaying, and the sector itself should repair as time goes on.
Many experts share hugely diverse opinions on whether prices will rise or fall during the course of the year. The best, and. Most robust advice to heed right now is to keep your head, carry on doing the things that you know will work, and hold the course.
Keep calm, carry on, keep the exit points in all your deals visible, structure each opportunity correctly, and ask for advice when you need it. Ignore the noise and stay focussed.
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