Inflation can actually make your real estate investment grow in value.
Today we’ll talk about how inflation can benefit you. Did you know that mortgage interest rates used to be pretty high, sometimes up to 15% or 20%? The loans would also often culminate with a balloon payment similar in size to a modern down payment. This made paying off a mortgage an even more momentous occasion, and homeowners would celebrate by throwing a big party and burning their mortgage documents. Guests would even bring gifts to help commemorate the occasion. This tradition has evolved into what we now know as a housewarming party.
Inflation is usually seen as a negative thing, and it’s for good reason. We don’t want things to cost more, especially if we’re not making more money. However, when it comes to real estate, inflation isn’t entirely a bad thing. Investing in real estate is a good way to hedge against inflation because inflation will also cause home prices to increase, thereby increasing your investment value. If you own a home with a mortgage, your monthly payment is fixed, but the value of your home is increasing, so you’re building equity.
“When it comes to real estate, inflation isn’t entirely a bad thing. ”
Rents usually rise during periods of high inflation, so if you’ve been thinking that you should wait out this crazy market, you may be waiting a long time. Although interest rates have been on the rise, they’re still much lower than they have been in the past, and many of our buyers can get into homes that fit their needs.
If you’re thinking of moving to another state and are in need of an agent in that state, let us know, and we will connect you. If you have any questions, reach out to us by phone or email. We look forward to hearing from you.