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Batten Down The Hatches

Veteran international investor John Corey comments

COVID-19 - What does the name mean? First, it is an abbreviation, so it is easier to say it. Second, the letters and numbers have a specific meaning. 'CO' stands for 'corona,' 'VI' for 'virus,' and 'D' for the disease. The 19 refers to the year 2019 which is when the disease was first recognised.

To set the record straight, in my opinion, it will be two or more years before this one is under control. And that is the optimistic view. Closer to five years if you want to factor in a vaccine which can be produced, distributed and delivered to individuals around the world. It takes time to administer an effective vaccine to 7bn people. What if the vaccine is only useful for six months? Repeating the whole process more than once a year for the world's population is a massive logistics operation. Accept that we are looking for a new normal rather than getting back to how things were.

Serviced Accommodation, the wider hotel sector, plus food/retail shops, which depend on office workers congregating and any number of property/real estate business are all going to pivot. Pivot or die. While they will still exist, the location, the product of services offered and economics have all changed due to the impact of COVID-19.
Investment growth areas will be hard to identify. We are at the end of the start rather than near the end of the pandemic. Now is not a time to be jumping in with both feet. And, it is also not a time to sit and wait. Maybe the people only holding cash can sit on the sidelines. The rest of us need to think about what we can do to improve the odds.

As I am not an investor in or operator of Serviced Accommodation or hotels, I will leave it to others to comment about the future of those two sectors.

Cream rising to the top
While continuing as a buy and hold landlord (four decades and counting), my primary focus is on fundraising for real estate investments. It has been a month of turbulence in the sector. There are some lessons to be learned, which can be of use to various property investing niches.

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