Maybe you’re listening to the news and feeling stressed. Maybe you are noticing the price of everything going up.
Are you concerned about inflation or interest rates?
In can be a scary concept. Inflation is the rise in the cost of things. It means the dollars in your hand are worth less.
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Five years of inflation at 5% means if you had $100, in five years, it's only worth $70. $30 has disappeared from your pocket. That sounds bad.
But real estate acts as a natural hedge or defense against inflation, because the cost of living is one of inflation’s biggest components.
Remember, even as the cost of living goes up, people are paying rent.
Getting involved in real estate can help you hedge against inflation and take advantage of what's going on.
How Inflation Can Make You a Real Estate Millionaire in 12 Months
How do you profit during times when everyone is feeling the stress of inflation?
The answer is real estate, but not just any real estate. The answer is apartment buildings.
Inflation becomes a self-fulfilling prophecy.
People expect inflation, so then they expect to get higher salaries, and meanwhile, people come to accept that fuel is going to go in price, rents are going to go up in price.
Once people accept it psychologically, they're more willing to pay more and more, which means that people that are selling stuff are going to try to ratchet up prices. It's very hard to unwind that psychology.
We know, inflation generally doesn't go up for 24 months and then go back down. I'm not aware of any instance in history where inflation was short lived. It tends to go up for a long time and then maybe flatten out for a long time. And I think we're just at the beginning of a long term cycle upward and inflation.
What does all that mean for real estate investors?
You might be surprised to learn, it's actually good news. Real Estate, along with hard goods like commodities, is one of the best places to store your dollars.
In an inflationary environment, when you look back at time, and you see what assets have done well during inflation, these are the asset classes that do well.
Rent, which is what we're investing in, is one of the biggest components of inflation.
If inflation is going up, that means our rents are going up. Meanwhile, our biggest expense – mortgage – is a fixed number. So, we tend to be winners in the inflationary environment. It's one of the reasons that real estate is one of the best places to put your money in general.
With inflation and the housing shortage and relatively low interest rates, rents go up.
Multifamily has been thriving over the past five years, and it’s going to get even better.
Millionaires are going to be made in apartment building investing in the next 12-18 months.
Your path begins with building a passive income stream and the best way to do this is investing in real estate with your partners.
Know your why. Get clear about why you're investing in real estate and what you want the road ahead to look like.
Set your goals and meet them everyday.
Real estate investing is the best way to bring in consistent mailbox money and build your wealth, not in spite of inflation, but in the midst of it.