Sold As Is #2 - What To Do With Your LAZY Equity to FIGHT Inflation

Posted by Matthew Hernandez on Wednesday, October 19, 2022 at 3:46:55 PM By Matthew Hernandez / October 19, 2022 Comment

In this episode of Sold As Is, Matt and I talk about what to do with the lazy equity in your home to fight inflation. Gas costs, mortgage interest rates, and inflation indicators are all rising, as can be seen. We realize that in order to combat these outlandish hikes, our customers, friends, and family need alternatives. We have put some time into our research, networking, and contact with people who have ideas for using the equity in your home to start making money. This income will lessen the stress that the majority of the globe is experiencing and offset the increase in expenses you are incurring. Real estate has a history of providing the benefits we need at this vital time, including rental income, appreciation, and even depreciation. Watch to understand how we can assist you right away.

Real Estate as an Inflation Hedge in 2022

As we move further into 2021, many experts are predicting that inflation will start to pick up in 2022. This has caused some concern for those who are looking to buy a home or invest in real estate. After all, if prices start to increase rapidly, it could price some buyers out of the market.

However, there is another way to look at it. While it's true that inflation can cause prices to go up, it also has the effect of making incomes go up as well. This means that, while home prices might increase, so will your ability to afford a higher price tag. In other words, inflation can actually be a good thing for homebuyers—as long as you're prepared for it.

Here's what you need to know about how inflation will affect the real estate market in 2022 and beyond.

How Inflation Affects Home Prices
In general, inflation has a direct impact on home prices. As the cost of living goes up, so does the cost of owning a home. This is because most homeowners have a mortgage, and mortgages are typically based on the 10-year Treasury note. When inflation goes up, so do interest rates, and when interest rates go up, mortgage payments become more expensive.

Of course, this doesn't mean that home prices will necessarily skyrocket overnight. In fact, they might not go up at all in the short term. That's because there's usually a lag period between when inflation starts to increase and when home prices follow suit. This lag period can be anywhere from 6 to 24 months. So, if you're thinking about buying a home in late 2021 or early 2022, you might not see much of an impact from inflation right away.

However, it's important to keep in mind that this is just an average; in some cases, home prices can increase much faster than the rate of inflation. This is often seen during periods of high economic growth, when demand for housing is especially strong. So, even though there might not be an immediate impact on home prices, it's still something that potential buyers need to be aware of—especially if they're planning on making a long-term investment in real estate.

What You Can Do to Prepare for Inflation
If you're thinking about buying a home in the next few years, there are a few things you can do to prepare for inflation:
* Save as much money as possible for your down payment. A larger down payment will help you avoid private mortgage insurance (PMI), which will save you money in the long run. It will also give you more equity in your home should you need to sell it during a period of high inflation.
* Get pre-approved for a mortgage before you start shopping for homes. This way, you'll know exactly how much house you can afford—and how much your monthly payments will be—before you make an offer on a property.
* Stay informed about changes in the economy and the real estate market. By keeping tabs on these things, you'll be better prepared to make decisions about when (and if) to buy a home during periods of high inflationary pressure.

Inflation can have both positive and negative effects on the real estate market—but if you're prepared for it, there's no reason why it can't work in your favor. By saving up for a larger down payment and getting pre-approved for your mortgage ahead of time, you'll put yourself in a good position to weather any potential storms on the horizon—and come out ahead in the end.

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