Real estate has long been considered one of the safest kinds of investments there is, and never is this more true during an era of record high inflation. Real estate is one of the few kinds of investments where, barring extraordinary events, tends to retain its intrinsic value even when the currency used in a particular jurisdiction does not. This then begs the question: while real estate itself may be a good investment, what is the best kind of real estate to invest in during an era of record high inflation?
Inflation causes the price of everything to rise, and when it comes to real estate, this translates to record high prices for the hottest commodity of them all – housing. Mortgage rates have risen as well, making it harder for the average person to break into the market, even as mortgage payments themselves remain the same (assuming that the lendee has acquired a fixed rather than variable rate loan, of course). This makes investment in real estate a highly profitable venture. The money spent on repaying the loan is worth less, even as the value of the property increases.
What all this means is that the best investment in real estate during an era of record high inflation remains residential, multi-unit rental housing. As more people are pushed out of the housing market due to high prices, they will by necessity turn to rental units in order to remain housed. This allows a savvy investor to potentially purchase a property and have the expenses on that unit paid nearly entirely by the tenants, while eventually pocketing some profit for themselves. In an era of high inflation, any form of passive income such as this can be a lifeline. However, it is important for investors seeking to take advantage of this opportunity to act fast – mortgage rates are only rising in response and won’t remain profitably low forever.
This is where a partner like FundFind Lending can help. We fund real estate investors and aspiring small business owners and help them take their goals to the next level. Our in-house financing and lending network helps you take the leg work out of your capital seeking mission.