How to Hedge Your Bets Against Inflation

How can becoming a homeowner help you to hedge your bets against inflation?
Inflation has been a hot topic in the housing market, and rightfully so. With the high price of homes and rates still inching higher than we would like, homebuyers are asking themselves if it makes sense to invest at the moment. It may seem counterintuitive but one of your best tools against inflation is homeownership. Tangible assets help to stabilize long term return and protect against inflation. A recent survey from showed that 72% of landlords said they plan to raise the rent on one or more of their properties in the next year. With rent cost already at historic highs, this could be a huge blow to your monthly budget.
Owning a home in today's market is not cheap, but with rents still on the rise it could be the best way to protect yourself from future rent hikes and unstable interest rates. A fixed rate mortgage will lock in your monthly housing cost for the life of your loan, not to mention if rates do drop you will have the option to refinance and lock in that lower interest rate you've been hoping for.
While it may seem like your life savings may be safer in a bank account, the truth is in times of high inflation the money you have sitting is actually becoming less valuable. "Mark Williams," Master Lecturer at Boston University, notes that those with low-interest bank accounts effectively lose money during periods of inflation because the interest they pay is eaten up by the decline in value. Indeed, any investment that generates a fixed rate of return or interest will see diminished returns in real dollars during inflation.
Real estate is one of a few investments that's both a tangible asset as well as an appreciation-oriented one. Property values tend to rise along with inflation helping you to build equity and hedge your bets against this unstable market place. At the end of the day you need a place to live, why not make it an investment in your future as well.

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