Post-COVID Financial Woes & Fallback Plans

How to Beat Post-COVID Money Woes like a Boss?

COVID has been a wake-up call for many of us. It brought before us, an uncertain future, a lifestyle that was unimaginably different from what we were used to and indeed, financial uncertainty.

For many that lost their jobs, and for others who lost their clients or had long-standing clients put their work on hold (like myself), the financial uncertainly really had us reassessing our expenses and incomes like a rushed accountant just before the tax deadline.

Idle Property is an Idle Asset

For me, this rush to reassess began by looking at my idle assets. I mean, I have land in Panchgani and an apartment in Pune. Both were unsold, unrented and unmortgaged.

And that’s terrible when you know that I have been a Finance and Economics major throughout varsity not to even mention my specialization in investment finance (yes, you can freely insert that monkey with closed eyes emoji here).

So there, I had assets lying around. And consciously so. I mean I do stay at my apartment every time I visit Pune. And that’s at least once every year, often time even more. So giving it out on rent was not an option (at least pre-COVID), nor was there any point in selling it.

Idle Assets Do Bleed Money

But COVID really had me reassessing things. My overhead costs for one. Apart from standard maintenance every month, things like repairs crop up in every single trip I make there. Probably because it is an apartment that’s not in regular use (and I think that apartment does get lonely sometimes), but she loves to have us spend on here every few months, just to make sure that we are aware she exists perhaps.

Then there are monthly charges for the maid. She comes in every day, she cleans, she dusts and does her things. She ensures that we can move back into that apartment absolutely anytime that we wish to.

Idle Assets have Opportunity Costs

So whether it is my apartment in Pune or my land in Panchgani, idle assets always have opportunity cost too. The cost of not doing something else that would have yielded an income, either lump sum or otherwise.

For example, in the case of my Pune apartment, the opportunity cost could be

  1. the monthly rent I lose out on by keeping the apartment idle. (of course, by that sense, this is hardly the best time to take on renters as rent rates are dismally low)
  2. the cost of the home if I had chosen to sell when prices were at a high
  3. the income from short term rentals as an Airbnb property or a vacation rental, had I chosen to earn from it in that manner, etc.

Of course, trying to earn out of a home in Pune (whether rental or otherwise) is currently not advisable, but this hasn’t always been so.

My Options With It Then

So I did my research. I am not in any immediate need of money, neither a lump sum nor in monthly incomes. So of course, I can sit tight and hold on to my assets for a little while longer. At least till the COVID-19 impact on housing improves to my advantage in terms of pricing. Business Today does predict a fall in inventory and stable pricing in 2021.

So the plan is to hold on for now and tide through these difficult times. If absolutely necessary, I could look up lump sum incomes either by selling the property or by mortgaging it. If rentals improve, I could look at renting it out, though it has never been my preferred option.

It is just nice knowing I have a fall-back plan. I was researching mortgages for a bit there, I mean if push comes to shove. And though it is a UK-based housing mortgage affordability calculator, it did get me interested in the kind of income I could make and quickly if I were in really dire straits.

All that research helps. It helps me sleep well, despite a reduced list of clients and slow worksheets and conversions. At least I have a fallback plan. Yay!

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