High inflation can destroy or enrich your real estate investments. Is real estate a good investment during inflationary times?

IS REAL ESTATE A GOOD INVESTMENT DURING INFLATIONARY TIMES?

1. How does high inflation affect real estate?

Periods of high inflation can cause rental property prices to rise.  In times of high inflation, it is difficult to get a mortgage loan. High mortgage prices mean real estate buyers have less purchasing power, so many people continue to rent. A spike in demand leads to an increase in rents which is great for landlords. Generally, housing prices tend to rise in inflationary period.  Real estate has intrinsic value, as people always need a place to live no matter how valuable their money worth.  If you can come up with favorable terms for private mortgages, you may be in a position to seize a potential opportunity.

Is real estate a good investment during inflationary times? / ph: pexels 

A potential negative for a real estate investor in times of inflation is the increased debt cost.  Banks will charge a higher interest rate and lend less.  Increasing construction material costs for new house is another disadvantage. New construction can be a very difficult investment in times of inflation.  When the budget is tight, traveling often cuts the budget quite quickly.  Resort real estate in ideal tourist destinations will not bring returns like other forms of real estate investment.

2. Is real estate a good investment during inflationary times?

Investing in real estate always depends a lot on the market and the location of that real estate.  But generally, rental properties including residential and commercial real estates are likely to experience higher-than-normal demand and returns compared to other property types in the high-inflation period. Having the capital available to be able to seize the opportunity when it arises will be important.

Inflation can have positive and negative impacts on real estate investment depending on the type of investment, the specific market and many other factors.  Make sure to do your research with any sensible investments and consult your real estate broker to identify promising options for your property investments.

Did you know that real estate has long been a playground for the rich.  It is also the best performing investment in modern history.  In a time of high inflation, you can actually build wealth through real estate for a fraction of the cost it used to be.

IS REAL ESTATE A GOOD INVESTMENT DURING INFLATIONARY TIMES?