Feb 5, 2023

How to Invest in Real Estate during Inflation

It is very important to think smart before investing in real estate. During the inflation increase, it is better that you take into consideration your budget and the amount of money you can afford. Therefore, we are offering some steps for you to invest in real estate during inflation:

First: Search for a property:

Basically, research is the first step when investing in real estate. This includes the surrounding area of the property itself, making sure of the legal work, and performing a good reconnoitering of the infrastructure in the area. There are a number of online tools that can help with this research, yet, consulting a real estate agent would be the best. You can contact us here.

Second: Understand the marketplace:

Taking a good look at the marketplace before having any decision regarding investing assets is very important. You should recognize whether this market is a seller’s market or a buyer’s. During high inflation, the prices are usually increased, accordingly, property rates are increased as well.

As to suggest an alternative to avoid putting your egg in one basket, you can go for Real Estate Investment Trusts (REITs) or fractional ownership. This has only one disadvantage: you do not get the choice of your preferred property, yet, you can choose how much to invest in any property you wish to own.

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Third: Cost of the property:

There are a few things to keep in mind in regard to the price of real estate. First, take in consideration the increased cost of living when budgeting your investment. Second, be aware that while property values may increase during inflation, they can also decrease if the economy weakens.

If you’re interested in real estate investment, there would be some ways to do so. Purchase a fixer-upper and renovate it yourself; this will not only save you money on labor costs, but you may also be able to sell your property for a profit down the line.

Third, investing in a rental property; will not only provide you with a steady income stream, but you may also be able to increase rent prices when inflation rates rise. Investing in a rental property goes under the umbrella of choosing fractional ownership or REITs.

Fourth: Things to take into consideration before buying a real estate asset

If you’re thinking about investing in real estate, according to Forbes, it is important to consider these factors:

Location: It is very important for a number of reasons; location will not only affect the value of the property but will also affect the rent you can charge and the expenses of maintaining the property. When inflation increases, properties in prime locations would hold their value better than those in less desirable areas.

Type of Property: Different types of properties are estimated with different rates during high inflation. For example, luxury homes do well during inflation, while more affordable properties may not increase quickly.

Rental Income: If you’re planning to get income from your investment property, you should consider how high inflation will impact rental rates.

Undervalued Properties: In a high-inflation environment, prices would rise quickly, so it’s important to look for properties that are currently undervalued. Working with an expert real estate agent would help you in such deals. We have plenty of expert real estate agents who are happy to help, contact us here.

Investing in Fixer-Uppers: Frankly, finding a property that is both undervalued and in a good condition is hard. Yet, most of the time fixer-uppers would offer good opportunities to invest in real estate during inflation.

Prepare Yourself for Higher Interest Rates: When inflation is high, interest rates usually go high as well. Therefore, if you plan on financing your real estate purchase with a mortgage, you should keep in mind paying higher interest rates.

Closing Costs: These are fees charged by lenders, title companies, and other entities when buying a property. Thus, it’s important to be aware of them when you’re budgeting your purchase.

Fifth: The perfect timing for buying a property?

Well, this answer depends on your individual financial circumstances.

If you’re looking for a property for investment purposes, timing is very important. Normally, you want to buy when prices are decreasing and sell when they’re increasing. So, you better consider that there are certain periods when prices tend to be particularly increased.

Also, pay close attention to market conditions whether locally or globally. Doing so would potentially make a great return on your investment.

Sixth: What if you are a property owner?

If so, the high inflation rate would be good news for you. This will allow you to sell your property for a higher price than the one you paid, which in return means that inflation has benefited you.

We can’t deny that there are risks in holding onto the property during high inflation. If inflation turns into an economic downturn, the value of your property could drop as well. Also, if interest rates increased, your mortgage payments would become more expensive.

In brief, the current inflation would be a good opportunity for you to invest, in a long-term asset, if you think about that. Each person has different needs and responsibilities, thus, investing in assets is the best way to guarantee high profits in the long term. Make sure only to consult an expert financial advisor before making any decisions.

We, in Akarkom International Real Estate offer you our services regarding buying real estate in Turkey in three stages: before buying a property, after buying a property, and during the purchasing process… We also provide you with the latest real estate offers in Turkey that are in line with your desires and the specifications that you desire .. including real estate offers and real estate suitable for obtaining Turkish citizenship through real estate investment within a record time of ninety days!

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