Fighting inflation through real estate investments
As you need to guard yourselves from inflation, you just can’t see all of your investments equally. Some of these investments might look lucrative. However, it is quite different with inflation. What you thought would get you a huge profit, might end up at loss. This is why investing is a tricky thing. Which is why you need a strategy that is specifically designed to increase your profits and guarding you from inflation.
In addition to debts and taxes, inflation is seen as another phenomenon that one can predict with near certainty over a period of time. Thus, it is really important that investors invest and plan their investments in such a way that they can even fight out inflation with ease. Inflation is sustained increase in the general level of prices of goods and services over time. So in order to fight this increasing inflation real estate investment is a really good way.
We see how real estate investment can be used as a weapon to fight inflation:
- Appreciating value
This is one of the most beneficial aspect of investing in real estate market. On an average you see property values appreciate between 3-5% annually. You can see even greater appreciation in some locations as well. For instance, if you get yourself a house worth 100,000$ with annual appreciation of 6%, this way you get your property values at 179,000$ in just 10 years. This is how not only you can keep up with inflation but you have also added some value and gained appreciation with your investment.
- Getting rent from your investments
This is a great way for a regular source of income that is going to increase with inflation as well. Smart investments in rental properties are going to cover your monthly expenses as well. If maintained properly these rental properties are going to help you reap a monthly rent that is going to increase annually. With your increasing rents you can fight any upcoming inflation that may affect your taxes, insurance and maintenance costs.
- Depreciating debts
Just as your real estate assets are appreciating in value, your debt owed on your property is actually depreciating in value with the rate of inflation. For instance, a 100$ mortgage payment in one year is worth 100%. However, in 10 years, with increasing inflation that debt is going to be worth far less. As you use leverage, or financial help to invest in real estate, you can take advantage of depreciating debt. Obviously, you will be paying your monthly payments but over the time the value of that payment would be less.
We know how inflation is inevitable, either it’s going to be high or low. Which is why you should always keep yourself prepared to fight inflation and real estate investment is a really good option for that. For investment option you can check out Parc Canberra. Parc Canberra EC is an upcoming Executive Condominium (EC) along Canberra Link and is developed by Hoi Hup and Sunway Developments Pte. Ltd. Parc Canberra is located near to the new Canberra MRT Station and Canberra Plaza. This development will have approximately 500 luxurious residential unit.
