Real Estate: Protection from Inflation

Inflation is rearing its ugly head again. This has caused a lot of economic stress for people. Their dollars don’t go as far as this did just a few months ago.

What’s a person to do. One approach is to pursue investments that can act as a buffer or hedge against inflation. Real estate is one of these investments. This may very well be a good time to investigate getting into real estate Boston.

Inflation 101

If you’ve read the news recently or gone to buy food or fuel, you know that prices for almost everything are rising. This is referred to as inflation, which simply means that your dollars are worth less than they were previously. This causes hardships for many, especially those on a fixed income or in low-paying jobs.

These days many people, especially politicians, are giving their opinions about the causes of inflation. We are told it may be caused by COVID, or by President Putin of Russia, for example. In fact, it is caused by too much money in circulation chasing too few goods and services. The massive spending programs passed by our government leaders are likely the root cause of the problem.

Real Estate: Protection from Inflation

Real estate is a time-tested hedge against inflation. It tends to hold its value as other prices rise. After all, people still need a place to live and many businesses need brick-and-mortar buildings for their operations. If used as rental properties, these rents can be increased along with the inflation rate, effectively hedging against inflationary headwinds.

There are many ways to invest in real estate. Many people are attracted to active investments and purchase rental properties and other forms of real estate, often assembling a large portfolio. Others take a more passive approach by investing in real estate investment trusts, which trade like stocks on the major exchanges.