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Real Estate is a great Hedge Against Inflation  . . .  right now!

Home prices seem to be reaching the bottom after several years of large declines in values.  Housing values have fallen more than 40% from their peak.  Current indicators reveal that prices may decline from the current levels by another 3 to 7%.   In many areas, the number of distressed properties for sale has climbed to records as a result of home foreclosures and many more are expected to enter the process this year.  This has created especially attractive deals in foreclosed and bank/lender repossessed properties.  Many banks are currently being forced to dispose of these houses at major discounts in order to recover capital as quickly as possible.  These properties, with beaten-down prices, serve as an excellent opportunity for investors to enter the real estate market and select those property investments that can provide both an inflation hedge and exceptional returns in the medium to long term periods. 

All this suggests that opportunities exist for investors to capitalize on undervalued, quality real estate as part of their investment strategy to protect capital from losses in the wake of emerging inflation.  As the Federal Reserve continues to print money, the dollar will de-value causing inflation and possibly even hyper-inflation to occur.  The dollar will have less purchasing power, tangibles like real estate will keep their value meaning it will take more dollars to purchase the same real estate, creating even greater yields in real estate ownership.  With inflation existent, the then much higher costs to build new housing will prevent any new construction from occurring.  As housing needs and demands expand, the prices of the existing supply of housing will have no choice but to rise to the "new" cost of building.

Indeed, those who invest in the current market can find great real estate deals that promise substantial returns over the medium and long-term investment horizon and a great hedge against inflation which could generate huge returns of wealth.

Real Estate investors who rent their real estate will be able to generate higher income streams as inflation continues, and therefore, higher yields on their property investment. Therefore, investing in real estate for passive income and enjoying the various tax write-offs could be a sound investment strategy to build wealth while paying off fixed-rate mortgage debt that is worth less each day so long as the inflation persists.

REO Foreclosures + Rental CashFlow + Inflation Hedge + Future Appreciation = High Profits

 

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