Is being a landlord going to be just like earning free passive income?
Self-employed and small and medium size businesses (SME) have started to realize the disadvantage of owning space, in traditional sense. Faced with high fixed costs and initial investments, they are increasingly looking for cheaper alternatives, such as co-working sharing space or online platforms.
Moreover, Covid-19 has accelerated such paradigm shift in real estate and rental businesses. As many space operators and property owners are struggling to find tenants in the face of shrinking economy and increasing work from home culture, they would inevitably have to find ways increase their value-added propositions.
Gone are the days when property owners simply leased their space to tenants and get paid for rents. Combined with increasing vacancy, financial expenses, management expenses, and rent overdue, once regarded as dream job of being landlord now requires strategies to survive, especially in commercial estates.
While the impact of COVID-19 may vary depending on geography and sector, real estate and rental business will be fundamentally different in post COVID-19, potentially in the following ways:
- Accelerated digitization of real estate management system
- Move from simply paying and collecting rent relationship to active relationship between landlords and tenants, in which landlords would need to offer customized solutions to the needs of the tenants
- Less demand to own space for work, leading to acceleration of shared, co-working space, yet with cautious measures to maintain social distancing and protect privacy
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