The Coming INFLATION Storm (and How You Can Prepare)
What's about to happen in the world economy will be truly unprecedented.
And if you're reading this on BP, congratulations on being in the right place at the right time.
Real estate investing is about to get a whole lot more interesting.
First, I want to acknowledge that we are in the midst of the worst pandemic any of us have ever seen. I have no intention of making light of the dire situation so many of us find ourselves in.
That said, this is a real estate blog. And we have businesses to run.
So here's what's about to happen...
Recently, the Federal Reserve has poured money into our economy at the fastest rate in over 200 years.
What does that mean?
It means the value of everything is about to go up.
It means the loan you locked in last year at 4% is about to be one of the best decisions you made.
Because as inflation starts to take its hold on our economy, the cost of things will rise.
Rents go up.
The value of your properties goes up.
Inflation hedging is just 1 of the ways real estate investors are paid (see my podcast to learn the other 4).
According to the Wall Street Journal: "It’s reasonable to assume that by spring 2021 the quantity of money will have increased by 15% and possibly by as much as 20%."
After the curve of COVID19 flattens...After the job market stabilized and we return to a functioning economy...you'll notice the prices of everything quickly rising.
That, combined with today's low interest rates and motivated sellers, means one thing:
There has never been a better time to be a real estate investor.
The #1 way to hedge against inflation is simple. Buy real estate.
Comments (6)
I am also curious about the midwest and other markets where you don't see wild swings in property values. I am investing in Georgia and it's a pretty stable market.
Christopher Stacy, over 5 years ago
Do you think this will impact all real estate types? I am in the Midwest and we typically don't see such major swings in real estate (either big swings up, or big swings down). I am curious what the outlook is on multifamily in the mid west, anyone happen to know of have any speculations?
Zachery Gries, over 5 years ago
I am also curious about the midwest and other markets where you don't see wild swings in property values. I am investing in Georgia and it's a pretty stable market.
Christopher Stacy, over 5 years ago
Do you think this will impact all real estate types? I am in the Midwest and we typically don't see such major swings in real estate (either big swings up, or big swings down). I am curious what the outlook is on multifamily in the mid west, anyone happen to know of have any speculations?
Zachery Gries, over 5 years ago
Hi @Jason Ridout, sorry just saw this! I couldn't agree more! It's a great time indeed. Thanks for the comment here. I appreciate it.
Mark Allen Kenny, over 5 years ago
I totally agree. After listening to Biggerpockets #374 with J Scott talking about "quantitative easing" aka printing money, I truly began to understand that real estate is a great hedge against inflation. We could be looking at a dollar devalued by 10, 15 or 20%. A lot of the printed money will end up getting pumped into the real estate market, driving prices up drastically. A great time to own leveraged properties!
Thanks for the post!
Jason Ridout, over 5 years ago