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Tired of Inflation? Build Wealth With Real Estate

Published July 12, 2022
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Inflation is a top concern for any investor. Money sitting in your savings account is essentially losing value, and that’s the case even for some of your other investments (like low-yield certificates of deposit (CDs)).However, you’re not powerless in the face of inflation. There are places you can put your money to significantly build your wealth without tossing your money into unpredictable investments like Dogecoin or GameStop stock.One of those places is real estate.Real estate investments don’t typically make for get-rich-quick schemes or overnight rags to riches stories — but they’re a strong inflation-battling strategy that yields short-term passive income and long-term appreciation. Property and rent prices tend to rise and fall with inflation, meaning wealth in real estate won’t diminish like wealth in a savings account.Let’s break down how it all works.Below, we’ll walk you through some of the risks of an inflationary environment (like we’re seeing right now). Then, we’ll discuss how real estate investments help battle inflation and how you can start building inflation-protected wealth.

Risks of an Inflationary Environment

Inflation can destroy the value of many investment opportunities. There are not many safe places to put your money where inflation won’t hurt it.For example, bonds, CDs, and treasuries are typically stable, reliable income streams. However, these usually come in the form of fixed interest rates. When inflation begins to outpace interest rates, it reduces the future purchasing power of your investment.US stock prices have a correlating (not causing) rise and fall with inflation, but they aren’t always a safe place to put your money. And if you already have money in the stock market, you’ll need to diversify your investment assets to mitigate other risks, too.

How Real Estate Investments Battle Inflation

Real estate isn’t immune to the effects of inflation, but it does have methods to help you defend your portfolio. For example, when the prices of goods and services start to rise, property owners can increase rent prices to keep the profits flowing. Home values will also typically rise with inflation, meaning you can make better long-term gains on your property investments.Here are a few of the reasons real estate is a smart investment for negating inflation:
  • Passive Income: Real estate investments net you regular income. Whether you’re collecting monthly rent on your property or quarterly distributions through Flock (more on how that works here), your investment isn’t just long-term — it’s ongoing.
  • Higher Rent: Rent jumped 17% over the last year, hitting a new record. Right now is the perfect time to earn top dollar from rental property investments.
  • Increased Property Value: Median existing-home sales grew at a pace of 15.4% year over year. While home values are high, they could be higher — meaning there’s potential for significant appreciation on your investment.
  • Safe Investment: Real estate is generally a safer investment, especially when viewed with a long-term lens. It can be a bit tricky when you’re trying to turn profits quickly or flip properties, but it’s almost always an equity builder over a long period of time. For example, just about every house purchased at the peak of the 2006 housing bubble is worth much more now than then.

Build Inflation-Protected Wealth Without the Hassle

Want to battle inflation with real estate investments without all the hassle of managing properties, tenants, collection, regulations, and the like? We have just the thing.Flock gives you all the benefits of owning a rental property (including inflation mitigation) while relieving the burden of property ownership. You get diversified passive income, and your investment grows along with inflation rates.You join by exchanging your property for shares in a portfolio of homes managed by Flock. Plus, thanks to the 721 exchange we use to trade the property, you get to defer taxes you’d typically pay when selling a property.Want to see what your rental property could be worth? Share a few details about your property, and Flock will get back to you with a free, no-obligation home valuation offer within 24 hours. Flock can help transfer the title and pay off any remaining mortgage in less than 2 weeks.

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