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Learn Why Many Are Saying Real Estate Is The Best Investment Than Ever Before

According to a recent Gallup survey, real estate has ranked number one in American investment preferences for nine consecutive years, and its popularity continues to grow.

Why Is Real Estate So Popular?

One reason for the popularity of real estate among investors is that it's relatively unaffected by inflation. When inflation increases the cost of everything from food to clothes to fuel to housing, if you have a mortgage payment at a fixed rate, then your monthly mortgage payment won't increase even if the price of everything else does. This only applies to homeowners, though. Renters will bear the brunt of inflation on their monthly rent, along with the increased price of everything else they need.

Increased Home Value

Inflation can be an asset to the homeowner because as the cost of living rises, so does the value of their home. This means more equity in your home and, therefore, your net worth. Homeownership has historically been a good hedge against the many negative aspects of inflation.

Don't let the positive increase in your net worth tempt you into debt, however. When inflation is halted suddenly by other economic conditions, you can find yourself upside down financially. This means that you risk losing all you've gained and more. Increased equity and the correlating increased net worth should be conservatively used if you're attempting to increase your net worth through real estate.

Are There Downsides To Home Ownership?

There are always negatives that can marginally offset positives, but for real estate and land, they're relatively minor. For instance:

  • You have no landlord to pay for repairs if something breaks; you must pay for needed repairs and maintenance.
  • If your neighbor moves, their replacement may not work well for you. It's more difficult to move when you're a homeowner than when you're a renter.
  • The makeup of the neighborhood may change.

However, these issues are relatively minor compared to the benefits, especially if you have researched your current home well.

What Should I Look For When Purchasing A Home?

As the adage says, the three most important aspects are location, location, and location. So, if you have the skills, look for the worst home in the best neighborhood you can afford when you're searching for a home. "Sweat equity" is one of the best ways to increase your net worth. However, if you don't know a hammer from a drill, you might want to forego the fixer-upper homes.

Looking For Homes For Sale In LA?

If you've been looking at homes for sale in LA, then call our real estate office at (310) 420-6531. They can help you narrow your search and find the ideal home for your needs. Don't let inflation scare you away. Call us today, and let's start searching for your new home.

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Daniel Lowe is the leading real estate agent in Los Angeles and has helped hundreds of buyers find their dream home in California.
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