What goes down eventually comes up. After a tortuous run for several real estate sectors after the start of the global pandemic, a sign of hope and opportunity for real estate investors is on the horizon with the introduction of the COVID-19 vaccine. Certain real estate sectors and markets are set to benefit more than others from a post-vaccine era, after pent-up demand for travel and communal activities return in a safer environment. For investors eager for a new opportunity, here's how to capitalize in a post-vaccine market.
One of the hardest-hit yet resilient markets during the global pandemic has been vacation rentals. Over the past year, people have been restricted from traveling, with the hotel and short-term vacation rental industries having a hard time recovering.
All this means there's a ton of pent-up demand for travel, meaning investors who own vacation rentals in top destinations across the U.S. -- and even the world -- will benefit. Vacation properties in areas with a solid history as a vacation destination, that are easy to travel to, and offer competitive or unique features for guests compared to others are set for high demand and likely increased rental prices in the coming year.
Real estate investment trusts
Another prime investment opportunity poised to profit in a post-vaccine world are real estate estate investment trusts (REITs). REITs, who primarily own and invest in commercial real estate, have had a tough run at the start of the year after the market crashed in mid-March. While many have recovered to their pre-COVID levels, several that operate primarily in hard-hit markets or real estate sectors like retail, office, or hotel and entertainment are still trading at discounted prices. Most of these sectors have a long way to go before fully recovering but are poised to see a large uptick in demand and performance in a post-vaccine world.
Distressed real estate
At any time in the market, there are always winners and losers. While many landlords have been able to ride out the coronavirus pandemic challenges, several have not. Closed business, reduced rental rates, or inability to collect rent or evict for nonpayment have put cash-strapped landlords in a tough position: sell or risk losing the property. Vaccines surely would help provide some relief to help spur economic activity, but that recovery will take time. Patient investors who have the cash available to be able to buy this distressed real estate at a discount can capitalize during the post-vaccine market.
The Millionacres bottom line
Whichever route you decide to go, keep in mind that all of the normal investing concepts still apply. You must look at your specific market for any additional details at play and do your due diligence on the investment before buying.