Sold As Is #1 - Real Estate as a Hedge Against INFLATION!
We appreciate you listening to our podcast, Sold As Is. We delve into the subject of inflation today and explore how owning real estate might act as a future inflation hedge! Gas costs, interest rates, and growing inflation are the main concerns in the United States in 2022. These three concerns are causing our real estate market to change when we zoom in extremely close to our local area of Los Angeles, California. In fact, Matthew and I discuss how crucial it is today more than ever to be a property owner. It turns out that one of the best methods to protect against rising inflation is through investment properties. Watch our podcast to learn more about why.
How Real Estate Can Help You Fight Inflation
Inflation is a word that gets thrown around a lot, but what does it really mean? In short, inflation is when the prices of goods and services go up over time. This means that the purchasing power of your money goes down, as you can buy less with the same amount of money.
Inflation happens for a variety of reasons, but one of the main drivers is an increase in the money supply. When there's more money chasing after the same number of goods and services, prices go up. And while a certain amount of inflation is necessary for a healthy economy, too much inflation can be detrimental.
So, what does this have to do with real estate? As it turns out, real estate can actually be a hedge against inflation. Keep reading to learn more about how real estate can help you fight inflation in 2022.
Real Estate Appreciates Over Time
One of the most important factors to consider when buying a home is its location. A home in a desirable neighbourhood will likely appreciate in value over time, whereas a home in a less desirable neighbourhood may not. So, if you're looking to buy a home as an investment, it's important to do your research to find out which neighbourhoods are likely to see the biggest appreciation in value.
And as we all know, location is everything when it comes to real estate. If you purchase a property in an area that experiences high demand and limited supply, you're more likely to see significant appreciation over time. This is why many people choose to invest in properties located in cities or other areas where there is significant economic growth.
Real Estate Provides Rental Income
Another way that real estate can help you fight inflation is by providing rental income. As prices continue to rise, renters will be looking for ways to keep their costs down. By owning rental property, you can provide them with a more affordable option and still make a profit yourself.
Of course, this isn't without risk; if inflation gets too high, renters may be forced to move out of your property in search of cheaper options. However, if you're able to weather the storm and keep your tenants happy, they're likely to stick around for the long haul.
While there's no surefire way to protect yourself from inflation, investing in real estate is one of the best hedges against inflation that there is. Real estate appreciates over time and provides rental income, both of which can help you keep up with rising prices. Of course, there are risks involved, but if you're smart about it, investing in real estate can be a great way to fight inflation in 2022 and beyond.
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