There is a lot of talk about inflation both in the media and in private conversations. With a Canadian election now looming in the fall of 2021, these are all hot topics for real estate investors, business owners, and what should be a topic of discussion for everyone else…but is it?
The price of most thing that people spend money on goes up slowly, like the analogy of a frog put in a pot of slowly boiling water will not jump out it will just cook because the change is happening so slowly. (that is a myth by the way the frog will actually jump out when it gets too hot!) Inflation can creep up on you devaluing your dollars and you get the same amount of goods for more money.
Real estate values are derived in a number of ways but the primary metric is the value of the land and the replacement cost. Rent naturally may fall when depressions occur however they rebound faster than many other investments once things start to recover. The investment of real estate has been called a “hedge against inflation” because its value keeps pace with inflation due to labor costs for construction and rents keeping up with inflation very closely.
In an uncertain world, which is less certain now than usual real estate has always been the cornerstone of building wealth for Canadians.
Further detail on this concept in this article here from Crew;
If you would like to learn more about how to add passive real estate to your portfolio or expand your investments without the headaches of day to day management. Contact us for a discovery a call
PS: did you know that you can invest you RRSP’s in real estate to get great returns secured like the banks? Give is a call and we can show you what the banks will never tell you.
To your success
Tim Reid
-Respect The Hustle