Most of us have experienced inflation in action. Prices increase over time, and we can all remember a time when everything was less expensive. Staying ahead of inflation is probably important to you, and investing your savings in assets that offer growth potential can help to counteract its effects.
Over the long term, real estate is an asset that historically returns higher-than-average yields during times of inflation due to the rising cost of housing that increases with the rising Consumer Price Index. Your home is actually the ultimate hard asset and often sees the most significant price appreciation during periods of high inflation. The price of property trends up over time, but you need to have the ability to invest for the long haul and not expect a quick turnaround.
PICK THE RIGHT PROPERTY
Owning single-family homes can provide a hedge against inflation, depending on local market conditions. You must carefully consider the future viability of the home you want to invest in. Will this home appreciate over time? Are there future development plans in the works that will appreciate or depreciate the value of your property? Are the neighbors as concerned as you are about maintaining property values? If you invest wisely, you will rarely see your investment lose value; if so, it’s usually only for a short period.
Real estate is a tangible investment that can be passed down from generation to generation.
One of the best reasons to invest in real estate has to be the ability to earn passive income. If you're already a homeowner and are looking to diversify your investment portfolio, consider purchasing a second home in an area of town that is sure to increase in value in the coming years. Whether you are growing equity in your own home through mortgage payments or have a rental property and employ a property manager to do the heavy lifting, you're earning passive income as your home values appreciate.
Northeast Indiana is a highly desirable region that continues to draw more new residents and businesses each year with its thriving economy and growing local amenities. Every situation is different; ask your financial advisor if investing in real estate is right for you. When you're ready to invest in your future through real estate, give the expert Realtors® of Mike Thomas Associates a call today to find out how we can serve you.