2020 has been a rollercoaster of a year, to say the least, we have become accustomed to a new normal riddled with uncertainty. Our lives have drastically changed and we are wondering if things will get back to how they were before. The housing market has been no exception to this uncertainty and change, we’ve seen house price growth slump across the globe leaving many of us wondering whether 2021 is going to be the year that house prices bounce back.

 

Pre-Covid

Firstly it’s important to consider the fundamental factors that set house prices. Starting from a simple stance of supply and demand we expect prices to reflect the incomes based in an area or commutable from that property. This is called the income bid-price spread and has been the dominant traditional theory widely recognized by economists. That is that as more jobs there are in an area the more people there are with money to purchase housing. Another big factor affecting house prices that we’ve seen play a part, especially in recent years, is interest rates and access to finance. Again acting on the demand side of the equation in a similar way is that as people have access to mortgages they can afford to spend more on a house which pushes prices up. When interest rates are lower it makes larger loans manageable on lower incomes than previously would be as the monthly repayments get smaller.

 

United States housing stock has always been seen as a pretty safe deposit of capital by foreign entities, particularly those from unstable currency areas and those living with political risk. As long as this is true there is always going to be pressure supporting the housing market. The dollar being the global reserve currency, highly liberalized financial markets, and loose capital controls make American assets attractive. When the dollar loses value against other currencies it makes the price of American assets cheaper to foreign entities too, so those from abroad who were thinking of buying a second home in America will find their money goes further. Experts generally believe that even with these influences and distortions the overvaluing of real estate in the United States is modest at best.

 

Covid effects

As social distancing has been made paramount to prevent the spread of the virus the move to working from home has been accelerated at an unprecedented rate. The fact that a large volume of the workforce now no longer need to live anywhere near their place of employment spells a huge structural change in demand for housing. The suggestion is that prices in urban centers that host high concentrations of well-paying office work are going to see their value stagnate and fall relative to the rest of the market. As many people are laid off demand falls, businesses are delaying investment until there is some certainty too corporate purchases of property are being delayed which in turn dampens down demand. Since the global financial crisis banks have had their lending rules tightened and restrictions placed on how precariously they can balance their position. Chiefly relevant to house prices is the lack of leverage and risk of default now relatively absent compared to 2008 we can assume that a serious crash is very unlikely.

 

It’s hard to see a clear reflection of the effects to some extent as the volume of transactions slowed down during the height of the lockdown and would probably have been biased towards the distressed quick sales required by those hardest hit by the pandemic.

In the United Kingdom, the Chancellor of the Exchequer Rishi Sunak granted a tax break on the stamp duty paid on house sales on the first £500,000 ($646,000) of the property’s value to address the slowdown on the other side of the pacific. Famously the legal red tape and bureaucracy can make transactions very expensive to implement and any cutting back of this would help the market without making anyone worse off.  In any case, the housing market is structurally changing and new types of business are booming the house guys in Washington DC take advantage of a relator free model to name just one-way value can be added to property without commissions sucking money out of everyone’s pockets.

 

Post-Covid

Moving forward it is hard to know how much of the investment that could not happen because of lockdown is an investment that has been delayed or has been canceled because it could be the case that a large amount of activity has been pent up only to be released in 2021 in a similar fashion to what happened after the financial crash. On both sides of the equation, there are multiple factors pushing house prices both ways. Nobody intelligent can conclusively say which forces are stronger and ultimately predict a movement either way.

Investing in businesses is a great way to build a stable income and advance your investment portfolio. But, like anything involving money, it can be a bit of a gamble. The investments might not pay well enough to make it worth the time. Or, even worse, you could lose money on an investment.

Luckily we have been in this game for many years, and in that time we have learned a few things about what investments are stable and profitable, and which ones aren’t. And we are going to share with you 5 Extrmley Protiftable Industria that you should consider investing in if you are looking to turn a profit.

 

The Cleaning Industry

This one might surprise you, but the cleaning industry is actually one of the most profitable ones out there. The biggest reason being it is a business that is always in high demand. In fact, as cities advance and develop, the demand for professional cleaning services also increases.

But these companies are always looking for investors. While they are profitable once they have established themselves, they need initial start-up capital. When you are screening companies to see if they are worth investing in, you should check they know what they are doing. Do they know the right type of vacuum for hardwood floors? Do they know how to use industrial carpet cleaners? If not, they might not be worth your money.

 

Independent Cafes

In the last five years, we have seen a significant rise in the number of independent coffee shops. People are growing bored with chain stores. They want the sense of community and economic benefits that come with shopping locally and supporting local businesses.

And this means they are extremely profitable. But opening and running a cafe is hard work. But you can avoid that by simply acting as an investor for someone else’s business. But, like with any investment, you want to make sure they have a solid business plan and are knowledgeable about the local community. If they are, then you should consider investing.

 

Tech-Support

We live in an age of technology. More and more people are automating their lives. And the sad truth of tech is that it breaks down randomly. Or the user has an accident that leaves it damaged. So tech-support firms are currently booming. Making them one of the safest and most profitable investments you can make. You will want to make sure you are investing in a good firm though. Try to avoid firms that mainly out-source their support hotlines or don’t have an on-site repair center.

 

E-Sports

I imagine you weren’t expecting to see this on the list. But E-Sports teams are continually growing in popularity as the E-Sports scene grows. And sponsors for E-Sports teams are finding themselves coming into a lot of money. So you might want to consider investing in a popular team or finding a new and up-and-coming team. If they make it big you are in for a massive payday. This investment might be a bit riskier than the others, but it can be one of the most profitable.

 

Courier Services

Malls are dying. There is no sugar coating it. People have turned to order everything online. And because of that, courier services are booming. So you might want to consider investing in one of the major delivery services. As the years’ progress, they are only going to get busier and turn more of a profit, so you will want to get in on this at the ground level.