Challenges Facing Real Estates as a Result of Covid-19 Pandemic

October 26, 2021

Investing in real estate is one of the best investment an individual can aspire to invest in due to the many rewards coming with it. 

However, just like any other investments, it has its own shares of challenges but this should in no way discourage you because the returns of investing in real estate are more rewarding in comparison to the challenges. 

The Covid-19 pandemic has been challenging to the sector, however, its resilience has been evident through the gradual recovery. 

Some of these challenges facing real estate include;

Economy in recovery

The Covid19 pandemic has affected the economy negatively. It has caused job losses to many people following firms shut down. Job losses means less disposal income in the population. Further, introduction of new taxes has been reducing incomes.

This high taxation has and will negatively affect the real estate particularly the investors focused in these type of properties, commercial, industries or geographical region that are most affected in this economic turn down. It’s anticipated that the economy would be in recovery for several years.

Massive public and private debt

In the recent past years many states have been facing a massive debt. More debt equals less investment activity. Massive debt has an impact on several economic indicators. Lots of debt means higher interest rates and less money for necessary projects. When investors get charged higher interest rates it tend to scare them away from investing in the real estate.

Lack of funds

Finance play an imperative role in real estate investment. Investment would be a little bit tricky when there is lack of funds, since there would be no capital to invest with. When there are no funds then there would be no any investment. Further when developers lack funds there are unable to launch new projects.

Unstable stock market.

Fluctuation of capital in market has become one of the major challenges facing the real estate. Financial help from the government for individuals and business have alleviated certain short term implications caused by the corona virus. However, the late payment and defaults on loan have grown rapidly it may be difficult to know how a long term may be.

Lack of affordable housing.

Across the nation, there is a huge lack of affordable housing. Further adding to this is availability of more high end properties contributing to the rent rising and home prices. However, in the near future there could be more opportunities to tap in low and middle income market. 

This is why investment companies such as Username Investments focuses on offering affordable land to the low and middle income earners. This is because majority of Kenyans cannot afford pricier properties when they are experiencing low incomes.

Time consuming process

Unlike any other items a person can purchase for example groceries, buying a new home has a process that one needs to follow. At times, the process maybe lengthy and time consuming. For  a person to invest in a real estate, they have to do some thorough research of the real estate property they want to invest in. They have to look for what would best suit their need.

In conclusion, despite all these challenges facing real estates, it’s still one of the best investment a person can invest in because all these challenges have their remedies aside from the many benefits that comes with. You can talk to real estate experts such as Reuben Kimani of Username Investment and he will guide you on how to invest in real estate amidst the pandemic.

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