Good morning, each time we get our formal shoes out and organise our laptop bags, the coronavirus unleashes a new variant and we are back to WFH.
For real estate too, 2021 has been a year full of uncertainties. While residential and industrial real estate surprised everyone with the speed of their recoveries, office, hospitality, and retail assets found the going tough.
2022 looks hopeful though and to high-five the new year, we have two 5-point stories today, and our 2021 Rewind Tape 2 has 5 headlines each for the year's hits and misses.
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5 Real Estate Investment Tips For 2022
2021 has been a year full of uncertainties for the real estate sector but even amid the roller coaster ride, cool headed folks have made money from their property investments.
As we step into 2022, here are some top real estate moves you can make to come out of the year, looking like a winner.
The Top 5 Moves
🏆 Evaluate Risks: Despite all the tips doing the rounds, no one really knows exactly what is going to happen in 2022. So first up, make sure your portfolio is well positioned in the event of a pullback, big or small.
Over-leverage is the biggest killer investors face during a market crash. It's thus a good idea to assess each of your property positions as it relates to returns, any debt associated with the investment, and its value today. Also, evaluate selling certain properties to increase liquidity if needed.
🏆 Choose The Right REITs: Real Estate Investment Trusts (REITs) performed incredibly well in 2021, achieving high returns for investors. However, remember that REITs aren't immune to market corrections or negative impacts from the economy or real estate market as a whole.
When you choose to invest in REITs, it's important to choose the REIT wisely and focus on quality companies in high-growth sectors like industrial real estate, multifamily, or warehousing and logistics.
🏆 Cash Is King: No matter where the real estate market goes in 2022, continue saving. Whether the market is up or down, you won't be able to invest in new opportunities without the funds to purchase the investments.
Continue to set aside money to invest in real estate, at a minimum of 15%, after your other commitments and cash investments are fulfilled.
🏆 Improve Your Credit Score: Keep an eye on things like your debt-to-income ratio and credit score for starters. With interest rates likely to go up in the face of rising inflation, your credit worthiness will take centre stage in 2022.
Though not every real estate investment will require financing, if you plan to actively buy and own real estate, it's likely you'll be getting a mortgage in some form or fashion, and having solid credit will improve your chances of getting approved.
🏆 Explore All Avenues: While pricing is high, this can be a great time to do research on alternative methods like commercial real estate, buy, refurbish and resell real estate, or others.
2022 is an ideal time to assess opportunities in the market and identify long-term trends that will likely overcome any market corrections and yield returns for your hard earned money.
2021 Rewind - Tape 2
The second part of the re-look at our top headlines of 2021.
☕ Need more Chai? Each description below has a link that takes you to the full story brewed in your favourite kitchen.
Top 5 Hits
🔼 Floating Real Estate: Instead of offering plush cabins for temporary guests, residential cruise ships provide condominium suites as permanent residences—offering buyers an opportunity to live at sea and never call any port home. Apparently, living at sea offers city-weary luxury home shoppers a chance to buy real estate without buying the dirt.
🔼 Retail Revival: Experts predicted things to get much worse for retail but thankfully they did not. In fact, a whole new tribe of retail stores seem to be emerging leaner and fitter through the storm.
🏆 Most Affordable Housing: Countries were ranked based on their overall 'Property Affordability Score', with 1 being the most affordable and 50 being the least. Turns out, with a score of 9.33, India has the most affordable housing of all the G20, OECD and European Union countries.
🔼 Studio Real Estate: The OTT space is fiercely competitive today and as competition for content production is driving up spending, private real estate investment firms are finding a way to put money in the studio game.
🔼 3D Printing: 100 3D-printed homes will be squeezed out of nozzles in Austin, USA in early 2022, creating the largest 3D-printed locality in America and perhaps the world.
Top 5 Misses
🔽 Coastal Housing Peril: Between 2016-2019, nearly a thousand homes in coastal areas of Kerala were partially or completely destroyed due to tidal attacks and extreme weather events linked to climate change.
🔽 Water Crisis: A 2020 report by the World Wide Fund for Nature (WWF) confirms that 30 Indian cities could face a ‘grave water risk’ by 2050 owing to sharp increases in population and reckless water mismanagement.
🔽 Virtual Limit: Could it be that no matter how good virtual reality gets, most home buyers are still not buying till they land up and see what their home-to-be looks like for real?
🔽 Housing Crisis: Australia’s skyrocketing housing cost is discouraging people who live on rent from having children, while having the opposite effect on folks who own their homes.
🔽 Delivery Failed: From 2017 onwards alone, more than 92,000 housing units across 1,410 buildings in Pune district have lapsed, as developers failed to finish the projects within the set time.
5 Personal Finance Ideas For 2022
The year end is a time when ridiculously outrageous things are quickly forgotten.
Take for example this blurb, where we (perhaps with the most badly managed finances on the planet) are giving away money related advice. 🙈
Nevertheless, here are 5 highly credible actionable ideas to illuminate your financial future.
Pay off high-interest debt: There’s no better feeling than reading the morning Chai with a clear head, no high interest EMIs, and nothing on the plastic in your wallet. 💡 Home loans are cool though.
Invest it: This new year, start an SIP, up your retirement contribution, buy some mutual funds or dip your feet into the ocean of stock buying. 💡 Real estate is also a solid investment. Try a starter home with a small EMI.
Donate some: From Covid relief funds to needy orphans who look up to the world with hope, there are a lot of options where your money can bring a truck load of smiles. 💡 Take money receipts and get an income tax deduction.
Tipping is awesome: An envelope with a thank-you note and a honey bee (INR 100) to your security guard, sweeper, liftman, parking attendant, food delivery chappie can go a long way, and...
Treat yourself: There’s absolutely nothing wrong with celebrating the end of what was undeniably a tough year.
You’ve earned it.
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Remember the Ever Given?
A gigantic cargo ship, the Ever Given, got stuck in the Suez Canal in March for six days, throttling traffic in a critical trade route and causing immense financial loss to the sector.
To move on from the past to a better new year, we can take inspiration from the Ever Given: It successfully navigated the Suez Canal earlier this month in its first attempt since its public humiliation.
Back in your mailbox tomorrow. 💚
☕ The Crew@Ginger Chai