skip to Main Content

Inflation-protected investments are those that provide a hedge against rising prices of goods and services over time. Real Estate BD’s inflation-protected portfolios contain assets that perform well during periods of higher inflation.

Breaking Down Investment Inflation

1. Real Estate BD’s fixed-income investment that guarantees a real rate of return is known as an inflation-protected security (IPS).
2. The annual percentage return will vary due to price changes caused by inflation or other external factors.
3. This means that the annual percentage return realized is modified for price changes caused by inflation or other external factors.
4. Expressing rates of return in real terms rather than non-inflation-adjusted terms provides a clearer picture of an investment’s value, times of high inflation.
5. The Consumer Price Index calculates the weighted average price paid by urban consumers for a streamlined market set of goods and services.
6. For many products and services, the Producer Price Index includes prices from the first business contract. The BLS also reports it monthly.
7. The Personal Consumption Expenditures Price Index is a broader measure of the difference in the price of goods and services purchased by consumers than the Consumer Price Index.

How Our Income Producing Properties Make Inflation Work

1. Rental income from investment property is one thing that generally keeps up with, if not exceeds, inflation.
2. In fact, in our current inflationary situation, rents in some desirable cities have risen by 30% in the last year.
3. A fixed-rate mortgage keeps loan payments constant, resulting in a spread between increasing rents and the cost of your monthly mortgage.
4. Insurance and taxes are also increasing; however, income-producing real estate manages to have higher rental income than expenditures.
5. For example, in our multifamily apartment complexes, expenses are generally half the rental income.
6. When inflation rises, a lower expense bill is frequently outpaced by the increase in income caused by rising rent checks.
7. In an inflationary environment, this effect can frequently drive increased cash flow and profits.

How To Invest Against Inflamation With Us

When it comes to investing in income-generating properties, our investors have two primary options. The first is direct purchases, which are typically single-family homes and necessitate a significant learning curve and work to generate good returns and manage the investment.

The second option is to invest passively with us, in which investors can buy a piece of a large commercial asset or invest in a portfolio of properties. These do not necessitate any expertise or active management on the part of the investor, and we enable investors to profit from the bigger tax advantages of larger commercial investments.

Real Estate BD's Investment Strategy Against Inflation

Investing in real estate is always extremely dependent on the demand and the property’s location. However, in a high inflationary economy, the following real estate investments perform better than others:

Rental property, including residential, commercial, multi-unit, and single-family homes, is expected to see higher-than-average demand and returns.
Banks may be offloading larger-than-usual quantities of notes, resulting in less competition and lower prices.
Real Estate BD follow market demand and appreciation in the same way that physical real estate does, and they can be a good way to spread your investment across a wide range of assets.

It will be critical to have funds available to seize opportunities as they arise. Inflation can affect real estate investing both positively and negatively, depending on the type of investment, the market, and other factors. Lower note prices, for example, may not be worth it if defaults are at an all-time high. As with any sound investment, conduct your due diligence and consult with us to identify promising options for your market.

Using Real Estate As Inflation Hedge

1. Capitalize on Cheap Money

Mortgage interest rates are at an all-time low, currently averaging 3.07 percent for a 30-year fixed rate mortgage (as of October 2021). Low interest rates allow an investor to take advantage of cheap money today in order to avoid paying higher rates later.

2. Export Inflation to Tenants

Having a single-family rental property allows an investor to pass on rising costs to tenants in the form of higher monthly rent. According to Arbor’s most recent Single-Family Rental Investment Trends Report, year-over-year vacant-to-occupied rent growth has increased by 12.7 percent, compared to the current reported rate of inflation of 5.4 percent. Since May 2020, annualized rent growth for single-family homes has averaged 8.1 percent, compared to a historical average rent growth of 3.3 percent. In other words, recent rent price increases are 2.7 to 7.3 percent higher than inflation.

3. Benefit from Rising Asset Values

Profit from rising asset values: Housing prices have historically risen over time, which is another reason why investors use real estate as an inflation hedge. According to the Federal Reserve, the median sales price of houses sold in the Bangladesh has increased by 200 percent since the third quarter of 1990, and by nearly 20 percent since the third quarter of 2020.

For The Best Property Rental Deals In Town

Get In Touch

Back To Top