Inflation Benefits Real Estate Investors in 3 Ways

Like an old college roommate, inflation showed up uninvited to the party, got a little out of control, and stayed much longer than any of us anticipated. Could our dear friend actually have any redeeming qualities?

If you’ve turned on the news or opened social media in the past few months, you’ve probably heard the word inflation. Repeatedly.

Rising inflation rates have a lot of people worried about their money and their futures. Should you be worried about how inflation will affect real estate investments? Let’s cover the inflation basic first.

You can think of inflation in two ways. It’s the devaluation of currency over time or the decrease in purchasing power of a currency. Either way, it means the same thing for our wallets. Money just doesn’t stretch as far as it once did.

What is Inflation?

Inflation occurs when money supply growth outpaces economic growth. Well, the government recently printed $3 trillion dollars meaning that 40% of all the money supply in circulation has been created in the last 12 months.

What Has Caused the Inflation We’re Seeing Now?

3 Ways Real Estate Investors Can Benefit From Inflation 

When inflation strikes, rents tend to increase. It is essentially a “goods or services” that follows the inflation line. Demand for rentals also tends to increase during times of rapid inflation, as well. As I’ll mention next, people tend to get priced out of buying homes and so demand for rentals increases. Increased demand equals increased rents.

Rents Increase

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