Inflation and Its Positive Effects on Current Economics in Multifamily Real Estate Investments

Stephen Patterson explains why rental real estate proves to be a safe investment strategy in an inflationary market.


Inflation continues to be a hot topic across the country right now. The consumer price index continues to show a 7.5% increase year over year. This figure fails to calculate the ever-increasing price at the pump. All indicators point to the current inflationary cycle being far from transitory. Rental real estate is continuing to prove to be a safe haven for

investor capital.

The Real Value of Tax Planning

The overall median rent nationwide as of January was $1,789 per month according to Realtor.com. Year over year that’s a 19.8% increase. January was the eighth consecutive month rents rose more than 10%.


“U.S. rental markets are more than making up for lost time, with January data showing national rents continued to surge by double-digits over last year”, Realtor.com chief economist Danielle Hale reported. This surge in rental costs creates the hedge investors seek when in an inflationary market like we’re currently experiencing. At KeyCity Capital, we are tracking these numbers very closely to ensure our properties are renting at market rates for the municipality they’re located in.


A secondary factor driving the rental real estate increases is housing inventory. As we continue to see population growth in the southeastern United States, housing starts are not keeping pace. This shortage of homes has not only increased home values but has had the secondary effect of driving rent rates higher. Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, verifies these insights when noting, “housing affordability and low inventory has made it even more challenging for buyers to enter into homeownership.”


At KeyCity Capital, we will continue to focus on multi-family workforce housing. The runway in this investment space shows a dynamic future for investor returns. Click the link below to set up a time to talk about your current portfolio along with our new offerings.


This surge in rental costs creates the hedge investors seek when in an inflationary market like we’re currently experiencing.
 

Take the time, schedule a consultation, allow us to do what we have been doing successfully for decades. Call 817.912.1569 to schedule an appointment with us or attend a local event and start building your own customized strategy. Use the link below to schedule an appointment today.




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