economic inflation

Inflation Forecast & Its Impact on Real Estate Investing

Why Real Estate Investors Need Not Be Afraid of Inflation
A lot of people think of inflation as a dirty word – after all it means that your dollar is less valuable. When inflation goes up, prices go up too, and you can buy less with the same amount of money. This sounds terrible to most of us. However, I have spent decades creating wealth for myself and for ICG investors, and over the years, my experience with inflation has been different. I can tell you that inflation, if it is indeed coming, could actually be a good thing.

Inflation on the horizon?

Look at the news headlines over the past year or so, and it is easy to see why people are predicting higher rates of inflation in times to come. The government has been pumping trillions of dollars into the economy after the pandemic wreaked havoc on factories, industries and businesses. It is expected that trillions of dollars more have been printed; perhaps are still being printed.
So basically there is a lot more cash in circulation and the same amount of goods and services available to buy. This is a classic situation for inflation. So yes, inflation is probably around the corner for us all. Yes, your dollar and mine will not go as far as it used to. But guess what? This isn’t a bad thing. In fact, this could actually be a good thing, as I have found over the many years of experience I have had in the real estate investment space.

Why inflation is not a bad thing.

Over the decades I have seen some really high rates of inflation. I have seen high rates of interest and difficult mortgage terms. However, even as things cost more at the supermarket and the raw materials for building homes such as lumber goes up, there is a silver lining to the cloud. Think about it – when prices go up overall, this means that your property value goes up too. 
Inflation also means higher rents. With everything costing more, this rise in rents is a natural consequence. This means that the passive income that your real estate investment generates also goes up. However, while everything around you is going up and becoming more costly, one thing remains the same – the amount you repay as and by way of your loan repayment. While the repayment amount might seem like a lot now, by the time you’ve repaid your loan, it’s going to seem about the same as a fancy meal out somewhere!
When you’ve opted for the 30-year fixed-rate loan, you’re paying the same amount over the years, regardless of inflation! And that is why I always tell people that the 30-year loan is a gift they cannot refuse; a gift that keeps giving over the decades. This is the reason I tell people that this loan is life changing for investors. Join me as I explain why inflation is not your enemy.