Many things can positively and negatively impact property investors over the course of their careers. Property prices fluctuate, values change, and areas evolve over time. You expect those things. However, what you don’t expect is a pandemic that locks down the world for months. If you’re a property investor wondering how lockdown is going to affect you over the coming months and years, then read on.
Demand for Social Distancing-Friendly Properties
For some time, open-plan offices and hot desking layouts have been favoured by businesses leasing commercial real estate in Melbourne. However, since COVID-19 made itself known, business owners have been searching for properties that are spacious enough for workers to practice social distancing.
Larger workspaces and break areas mean that each staff member can have a greater area to call their own. Savvy property investors list their properties as being suitable for X number of employees to have X square metres each. Consider changing up how you advertise your properties to make them more desirable.
More Flexible Leasing Agreements
Companies across Australia are trying to adapt to a new way of carrying out business. Demand for flexible leasing agreements is on the rise. So, one way that an extended lockdown has been impacting property investors is in the contracts they draw up for their office spaces. They may decide to set in place minimum or maximum lease terms, depending on what best suits both parties.
Understanding Government Help Availability
It was confirmed in June that Australia is in a recession. An economic downturn can have a devastating effect on many industries. However, the government is not about to lie down and do nothing about it. Government help is available for business owners to put them in the best position to remain afloat. One such system is the Commercial Tenancy Relief scheme offered by the Victorian Government.
Though this government assistance is a good thing, it can have an impact on property investors, depending on the schemes businesses take advantage of and how they use the funds. Being aware of your entitlements and those of your tenants can make all the difference to how you approach the coming months and years.
While COVID-19 is influencing the property market, that doesn’t mean your outlook as an investor has to be grim. With the potential for price drops in some areas, many investors are in an ideal position to take advantage of being able to purchase properties with lower price tags.
It’s worth knowing, however, that you need to be in it for the long game. It may be some time before property prices move back to pre-COVID times. In this climate, you may also need to be more realistic with lease pricing.
A New Way of Leasing Space
COVID-19 has seen thousands of Australians out of work. However, it has also highlighted just how resilient Australians really are. Many people have decided to start their own businesses – often in positions of sole tradership. Could this create a new opportunity for property investors?
Instead of trying to find a single tenant for your entire office block, you may be better off hiring space out on a per-office basis. While it may not be how you have carried out property transactions in the past, it can secure an income and provide a new business with a cost-effective workspace.
There’s no denying that COVID-19 has affected the world in many ways. Property investors are not exempt. Still, it’s helpful to be aware of all that lies ahead. The more informed you are, the more prepared you can be for whatever challenges and triumphs lie ahead.