Despite the financial stress, uncertainty and knock-on impact the covid-19 crisis is causing for the economy, businesses and households, there are also multiple opportunities for people to create wealth for themselves amid the crisis. Looking at history various companies that have grown into massive multi-national companies were in fact born during a time of recession – Microsoft, General Electric, General Motors, Disney, IBM and the Hyatt Hotel Group to mention a few.

Quite often a change in perspective can change your life for good. Look beyond the challenges to see the opportunities. Here are a few opportunities to look at:

• The current situation is certainly changing the way we are living, working, communicating, learning and looking at the world. This in itself creates multiple opportunities for new ventures identifying current needs and coming up with solutions to cater for those needs. Starting a new business or side hustle during a time of economic downturn gives you the advantage to start off at rock-bottom and you can only grow from there if you can survive this period.
• For current business owners this is an opportunity to be creative and add a new business line, product or service to your current offering especially focussing on the world of online business opportunities that has opened up for us.
• Many businesses are really struggling during this time and would be keen to accept assistance in the form of funding or capital investment (equity partner). Recent research indicated that there are multiple businesses needing less than R100,000 to help them survive. This is an excellent opportunity to support small businesses by investing in those businesses or borrowing much needed funding to them. Keep in mind that good performing businesses are one of the few investment types that can give you double digit returns over a prolonged period.  
• With the interest rate been cut with another 1% (4,25% repo) on 14 April following the cut by 1% (5,25% repo) in March 2020, this is the perfect time to remain paying the higher instalments to repay your debt quicker and become debt-free. 
• The interest rate cuts also create opportunity for investors to invest in property. With lower bond instalments it is more affordable to buy an additional property now. In locations where there is a high demand for rental property and being in close proximity to businesses less affected by the financial crisis, there is a good possibility that rental income will remain the same, resulting in investors receiving a bigger return on their investment taking into account the lower bond instalment.
• Current homeowners in distress might sell their homes and accept a lower price for it. That creates the opportunity for investors to buy property at a lower price and resell it at a higher price in future once the markets have turned or rent the property out.  
• Due to financial markets not performing well and many companies being under pressure, there are plenty of opportunities to invest in shares and unit trusts due to lower share or unit prices. The cryptocurrency price is also on the rise. However do some research to ensure you buy in at the right time when the price is at a low and that you understand the risks attached to the investment. Also ensure that the company you want to invest in is taking a plunge because of the pandemic but will most likely survive and continue to grow. You don’t want to invest in a company that might close down sooner than later. Also look out for companies in industries that will thrive post-lockdown because of the new way of living and doing for example e-commerce, technology and distant learning.        
• When the Rand is weakening Forex trading is benefiting largely and earning dollars is a huge benefit to your portfolio.  
• History has shown that commodities like silver and especially gold are performing well during a recession or times of uncertainty and prices have already increased.

This crisis emphasizes how important it is to pay attention to creating financial fitness and to educate yourself about finances. Financial fitness assists largely to experience a lot less stress during times like this. The more informed you are, the better financial decisions you will make and the brighter financial future you can create for yourself and your family. 

Invest in yourself, your wellbeing and your health during this time. Times are tough and we all face multiple different challenges, but we will survive and we will get through this. You want to be in a healthy state of mind and have a healthy body to hit the ground running after all of this.     

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Property investments are still considered to be one of the best performing investments over the longer term. Property investments do not only provide you with an income stream in the form of rental income, but properties also increase in value giving you a capital gain on your investment. Good property investments can provide you with actual passive income and your income is in the form of cash every month.

Property investments are a good option to add to your investment portfolio as part of your retirement savings platform. Earning rental income during retirement is an excellent way to boost your retirement savings. However keep in mind: properties can decrease in value; you might struggle to sell your property and covert your investment into cash; finding good tenants who take good care of your property and pay their rent might be difficult to find and the maintenance on properties might cause for your investment to become less attractive.

Consider these 4 important things before investing in property:

• Tenants can cause havoc in your life. Consider appointing a property rental agency that administers the renting process on your behalf. They will advertise for tenants; screen tenants; negotiate with tenants; do all the paperwork; do property inspections; collect your rental income; and take care of the maintenance. You will have to pay them a monthly commission, but when having a great agency, it is definitely worth it. Just keep in mind the commission will have to be deducted from your rental income. There are also agencies out there who don’t do a proper job and causing you even bigger headaches. Look for an excellent agency when going this route – it will give you the benefit of a hassle-free investment from which you can earn real passive income.
• Investors sometimes make the mistake thinking the rental income should only cover the bond for it to be a good investment; forgetting about the additional costs involved when investing in property: building insurance, security fees, levies, rates and taxes. The owner is responsible for most of these costs. If the rental income doesn’t cover both the bond as well as the additional costs, it can become an expensive monthly cost on top of your living expenses.
• Maintenance on properties can be very expensive and cause for the return on your investment to become a lot less attractive. Remember maintenance is for the owner’s account unless it was damage caused by the tenant. When you buy a property, ensure that it is low in maintenance i.e. painting, wooden features etc.
• Be careful not to over-capitalize on your property. Renovations and adding features like electric fencing and air-conditioner will make your property more attractive for tenants but recovering the costs might be difficult. If you add the money spent on renovations to the purchase price of the property, you might find that the increase in capital value when you want to sell it fall short and you are actually making a loss on your investment.

Definitely do consider adding properties to your investment portfolio, but be money wise and keep these 4 considerations in mind before investing in a property.

Written by Ronel Jooste

Contact Ronel: ronel@financiallyfitlife.co.za

CA(SA), Financial Consultant and Coach, Blogger and Speaker

For more information about my financial wellness programmes visit the website