What’s the best strategy to manage in REITs during Covid-19!
Posted: Sep 16, 2020
The global financial crisis never fails to teach a lesson when it comes to the real estate industry. But guess what, the real estate industry has always come back with a bang with better reforms and strategic moves. Amid this COVID-19 situation, there are so many strategic moves and let us see how the REIT market is facing this biggest economical disruption. Todd Kellenberger – REIT client portfolio manager at Principal Global Investors quoted that "The best time to make strategic moves is before a crisis, not during it". Here are few tips for you to empower your monthly balance sheets and withstand against this global crisis.
Coping with liquidity
Liquidity exactly determines whether the real estate property can be sold right on time or after a certain period. At this point in the pandemic, you can be a property owner or real estate agent you must try to maintain the liquidity. Many people make wise moves by selling their property for exact market value if you are getting chances to sell your property to exact or above market value, you can certainly choose to sell it. But when the assets are marked up for below market rate, then that is where you must remember the principle of "Coping with liquidity".
The 2008-2009 financial crisis in the REIT industry has already taught enough strategic and backup ideas to preserve the chances of a downturn. But still pandemic has swept many people’s jobs and closure of businesses. The spike for unemployment kept on increasing while the dividends and funds kept on decreasing.
A better plan
There are so many new plans on how to invest and where to invest? Does it speak on the aspects of investing either on commercial or residential property? But to overcome this financial crisis some experts suggest conserving the cash. When the pandemic started during late February in the U.S.A people were thinking it may continue for a few days and it will be over soon but eventually, businesses started failing and economic flexibility became rigid. So many experts suggest preserving cash to cross this recession period. Even some companies are reducing their monthly dividends in the aspect of conserving cash.
Who needs help?
Are you somebody who owns the residential property? Then you are better when compared to lodging and retail property owners. The hospitality and retail industry’s cash flow has been hit hard due to the pandemic. The scenario kept on worsening during the stages of quarantine extension. The GDP for 2020 is predicted as 6.5% and the unemployment rate of 2020 is 9.3% which is really huge when compared to the previous year's data.
The best plan to survive your business or property during this Covid-19 is to maintain a strong balance sheet. The major companies that had strong unshakable balance sheets are still facing the pandemic storm without any hurdles. So, make sure that you are sticking to a better balance sheet and take advantage of the options which are available for REITs. This balance sheet algorithm will improvise your cash flow and help your business to sustain. Visit: https://www.enrichedrealestate.com/