Inflation rates are the highest they’ve been in the last 40 years. However, investing in real estate is still the best investment Americans can make, even in (and maybe, especially in) times of inflation. In this article, Andrew Shader, a Ft. Lauderdale real estate investor and expert, explains why.
Real Estate: A Better Investment than Stocks, Savings, and Gold
According to an annual Gallup poll, for the eighth year in a row, Americans have voted real estate as a better means of investment than investing in stocks, putting money into savings accounts, or even investing in gold.
In fact, 41% of participants chose real estate, 26% chose stocks, 18% chose gold, and only 9% chose savings accounts as the best investment.
Why is real estate such a good idea? Because even in times of increasing inflation, the value of real estate increases. Anyone who owns a house — and anyone thinking about buying a home — will delight in this fact.
Why Choose Real Estate, Even When Inflation Is Rising?
It’s more important than ever to understand inflation and the financial benefits of owning a home, explains Andrew Shader. When inflation goes up, prices for just about everything else go up, too: including cars, groceries, clothing, and other goods and services. Housing costs rise, as well.
The benefit to those considering purchasing a home lies in the fact that you lock in your monthly housing payments (with a fixed-rate mortgage) when you buy a home. This acts as protection against rising housing costs and increasing house payments as inflation continues to go up.
There are many parts to a total housing payment — insurance and taxes, for example — in addition to the actual cost of the property.
Even though other portions may increase with inflation (and over time), the house payment itself remains the same. The house payment represents the largest portion of the total housing payment.
So essentially, by purchasing a home in times of rising inflation, you can keep the largest portion of housing costs at the same payment. Those who rent their homes are unable to reap this benefit, and they are not protected against rising housing costs. Rents go up during times of rising inflation.
Real Estate: The Best Hedge Against Inflation
History shows that during inflationary periods, housing prices rise, too. If you purchase your home during this time, your house becomes an asset that increases in value. Housing is a strong investment that increases in value over time, even though your payments with a fixed-rate mortgage don’t.
Sound Guidance from Andrew Shader
To learn more about how buying a home can be a sound investment, reach out to a real estate expert. Andrew Shader is a Ft. Lauderdale real estate investor specializing in purchasing properties and bringing them to their full market potential.
His strategies have led to increases in property value of 60% and higher — without relying on future appreciation.