This question is one every real estate agent is getting right now, so I figured we’d just clear this up for you here.
Yes, inflation is rampant. In fact, according to the U.S. Bureau of Labor Statistics, inflation has reached 8.5% in March (reaching 5% for shelter)—and it hasn’t been this high since December of 1981! For homeowners, real estate investors, and real estate agents like myself, this isn’t all bad. Gas prices are burning us, meat prices are really packing a punch, and even travelling seems harder to swing. Inflation means every dollar in the bank is worth less. This is scary.
But there is a silver lining here for home and property ownership. Your money is worth more in property than it is in the bank. Huh? Yup, as real estate investors ourselves, we are feeling happier than ever about each of our property investments, and it’s not just because appreciation is at an all-time high while inventory is at an all-time low. It’s because the money we’ve invested into these properties is increasing in value while the money we have saved in the bank is decreasing in value.
So why buy now? If you have money burning a hole in your pocket—or more accurately, shrinking in your bank account by the day—putting that cash as a down payment into property is the safest, smartest, and best investment strategy you can make right now.
Think of it this way. Your real estate agent finds you a home to buy for $10. You have $8 in the bank, and you’re able to put $2 into a down payment for the home. The remaining $8 in your bank account is decreasing in value every time inflation goes up a notch. But simultaneously, the $2 of equity in your new property is increasing in value as the property becomes worth more and your equity grows in time. In this example (kudos to your realtor, btw, what a great deal on a property!), your $2 investment is safer, growing, and far more stable (thanks to record low inventory and no stop in sight to supply and demand), than that remaining $8 in the bank, which is as volatile as the inflation rates we’re seeing each month. I know. This kind of makes you wish you were investing EVEN MORE of your dollars in real estate.
Go big, or go home, friend. (When talking real estate, you fortunately get to do both!)
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