Is Real Estate a Hedge Against Inflation?
Is Real Estate a hedge against Inflation?
Some investors, like Jim Rickards, advise a barbell investing strategy, which implies having a balanced portfolio that both hedges for and against inflation. In this regard and more, it’s important to know ask the millionaire dollar question; does inflation support or disrupt real estate investments?
The answer, according to David Wieland, real-estate multi-millionaire, founder of Realized, and council member on Forbes is that yes, inflation supports real estate. This is because:
Inflation makes home prices rise, (along with all kinds of asset classes, commodities, and day-to-day product prices also increasing), and so you increase the amount of equity you have in the home, rather than the debt you have to pay back to the bank. Equity is YOUR money, and can be made liquid through refinancing, and potentially financing a new deal. Truly exciting stuff if you’re someone who plans on building a real estate empire.
Homes that hit rock-bottom in the 2008 recession rose back up and then some a decade later. If you’re in the buy-and-hold game for life, know that you can outhold the nastiest of recessions.
Real estate provides a recurring income, so long as you got yourself into a cash-flow positive deal. Recurring income is recurring…
