Buying right now during covid-19

[Brock Best]

I’m hesitating on closing on my first property, a small duplex, right now with how the Coronavirus is continuing to spread. One unit is occupied by a very good tenet. The other unit will be vacant by the time I close, if I do so. Is it worth using my reserves for several months to cover part of the mortgage before getting a new tenant in place until this pandemic is over? I have reserves to cover about 7 months worth if for some reason I had to cover the whole mortgage. But is it worth the risk buying if I have to drain my reserves? It’s a small property. Only $60k mortgage so my expenses are low. But is it worth the risk at this moment?? Just nervous because this is my first property. Anyone’s thoughts would be great to hear. Thanks everyone!

[Patricia Steiner]

As a broker, I've had three different client reactions to recent events:  1) Cancel and Run!, 2) Close Faster!, 3) I'm going to buy everything!

The ones that have canceled were at high risk of losing jobs and were buying properties that needed some immediate rehab investment. Others felt that they needed to close NOW and get a tenant in place to have an inflow of cash at a time when other sources were being challenged. And, the third group - and by far the largest, see this as a buying opportunity as prices drop.  In my market, we have 200 new people moving in every day. Housing is in great demand and inventory is low.  If you buy, you can lease.  That won't be the case everywhere nor will it be here forever.

I recommend stepping back and looking at how much rental inventory is available in your market now. Consider the demand. Is acquiring a Section 8 Tenant a possibility where Uncle Sam pays the greater portion of the rent and even has tenants available for screening in some markets?  Could you rent to visiting nurses should the virus progress your way?  The world is changing but it still needs housing.  It sounds like you found an affordable property that already has one great tenant in place...trust yourself.  

Tough times won't last forever but tough people will.  Just one opinion...hope it helps. Stay safe.