Real estate is a great hedge against inflation on debt. The home price rises over time and ultimately lowers the loan-to-value of any mortgage. This acts as a natural discount on the mortgage. The equity on the real estate will increases over a period of inflation. However, your fixed-rate mortgage payments remain the same. As always, buyers can use Mortgage calculators to calculate their monthly fixed payments.
The hedging of inflation is also supported with those who own rental properties and collect income. Those leases are typically short-term leases. The short term leases allow for the adjustment of rent to account for expenses, but also inflation. Adjusting your rent while keeping up your on your mortgage as this further increases the cash flow. Investors know, cash flow is one of the first criteria's to limit your risk and exposure. In this case investors are furthering increasing their cash flow and decreasing their debt to equity ratio.
Also, real estate is a good hedge against inflation because the value of the properties over time will stay at in a positive curve. Look at the 2008 bubble burst returned to their pre-crash values with a decade. It is expected the current value increase over the last few years will be maintained as the fundamentals are strong with a true housing shortage. The 2008 crises had many moving parts due to the sub-prime lending practices leading to a negative trend in housing prices.As such, inflation will lend to increased cash flow and values will surpass inflation prices.
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