Beverly Hills real estate agents know that in times of rising inflation, real estate is a great investment because rental payments and real assets inflate with inflation.
Though the market is starting to shift to more of a buyers-market, prices continue to rise with Miami leading the pack at 41% year over year. Inventories are rising as buyers are more hesitant, but there’s still a shortage of housing available for potential buyers across America.
Rents continue to rise faster than ever at a pace of 13.6 percent. The growth rate is triple what it was a year ago, and is especially higher in the Sun Belt and in Florida, with Miami (40.7%), Orlando (24.6%), and Phoenix (18.6%) leading.
Investment companies are purchasing large tracts of single family homes to rent out and managing them as a portfolio. Large firms like Blackstone can borrow money at far less than the typical mortgage rate of around 2 to 4 percent, giving them an advantage over single family homeowners.
But real estate investment isn’t only for the world’s 1%. Crowdfunding platforms like Fundrise allow the average investor to benefit from rising prices and rental payments in an inflationary environment. Fundrise says its average annualized platform returns were between 7.31% and 16.11% between 2017 and the third quarter of 2021.
Whether you are an accredited investor or looking to take advantage of the opportunities in real estate in this environment, rising rents and prices continue to bring good news.