16
Sep
2020

Gary Saitowitz Points out the Mistakes REIT Investors Must Steer Clear of during the COVID-19 Pandemic

This year, because of COVID-19, life has come to a complete standstill. Consequently, we simply cannot evaluate real estate markets using usual techniques. Until now, the standard equation used to be that more jobs would culminate with a rise in demand for housing. However, because of the coronavirus pandemic, there has been a huge loss of jobs and widespread unemployment across multiple sectors globally. Hence, the standard analysis fails to work under these dire circumstances. We should believe that the present situation is a transient phase and things will get back to normal. It is expected that jobs will eventually be restored and economic activity should be resuming sometime soon, hopefully within the next year.

As per https://www.cnbc.com, it is best not to react to any sudden and unanticipated market fall. Experts believe that volatility seems to be inherently scary. When you are scared, you tend to be paralyzed with fear that you constantly start thinking about. Fear is bound to adversely impact your well-being and may, in all probability, lead to bad decisions.

We understand that REIT investors have been the most impacted during this current market meltdown. At the moment, it may seem like a wise decision to sell your REITs, but this sort of approach may end up costing you in the long run. REIT investors must exercise restraint and caution and should avoid the following real estate investment mistakes, as highlighted for you by our expert, Gary Saitowitz.

Top REIT Investor Mistakes Identified by Gary Saitowitz

REIT investors should avoid the following mistakes if they wish to navigate through COVID-19 accurately.

Mistake: Selling When the Market Is Down & at the Bottom

When the market dips substantially, like it did all through 2020, you should mandatorily assess if you are selling simply because there has been a decline in the REIT, or because you are under the impression that it will sink even further. It is highly advised that you avoid selling at this juncture.

Mistake: Not Scrutinizing a REIT Accurately

Whatever you are planning to do with your REIT, whether it’s selling, buying, or standing pat, remember that it is of pivotal importance to examine everything meticulously and to evaluate the current industry status with utmost accuracy and precision. We know that REITs have been operating in multiple sectors including lodging, healthcare, retail, apartments, data centers, etc. You cannot implement a cookie-cutter approach simply because the dynamics of individual sectors seem to differ widely.

Mistake: Allowing Fear to Stop You from Investing in Good REITs

Once you have diligently evaluated the company, you shouldn’t allow fear to stop you from purchasing good REITs. If, after a thorough analysis, the long-term future promises to be good, you shouldn’t make the mistake of not buying more REITs, particularly if you are getting a major discount. However, keep in mind that not all discounted REITs will be a bargain.

Conclusion

You should make the most of the power and versatility of diversification by incorporating more top-quality firms into your portfolio once they are cheaper in comparison. It would be wishful thinking if you assume that things will bounce back to normal all at once. For the transition back to normal to take place rapidly but smoothly, you should understand that a greater utilization of technology and diverse ways of thinking are required.

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