History has revealed that rental properties are a safe investment, especially in turbulent economic times where inflation runs rampant. Under conditions like this, inflation worries mount, and investors are often drawn towards rental properties as tangible, income-producing assets that can effectively safeguard their wealth. With this in mind, we will explore why investing in rental real estate is an inflation-proof strategy. But before we dive in, let’s capture the heart of the topic in a quick summary to get the ball rolling:

Are rental properties a safe investment when inflation is high? Yes, investing in rental real estate is a safe investment choice during periods of high inflation. This is because Buy and hold properties are hard assets that maintain intrinsic value regardless of economic fluctuations, and as inflation rises, rental income increases accordingly, acting as a hedge against inflation. Additionally, as purchasing power decreases due to surging prices, more people look to rent rather than buy, further validating its position as a secure investment avenue.

Why is Rental Real Estate a Secure Investment in a High-Inflation Environment?

Investing in rental real estate offers numerous financial advantages that make it a wise strategy for those seeking to protect their wealth, and it’s widely recognized as a reliable shield against inflation due to its unique characteristics that we will discuss below:

Rental Real Estate Enables You to Invest in a Tangible Asset that Doesn’t Decline with the U.S. Dollar

The U.S. dollar was previously backed by gold, which gave it real measurable and tangible value. Yet, as we look at the present-day scenario, we find the dollar backed by nothing but debt and the strength of the U.S. military – a fact that certainly doesn’t inspire much confidence.

It gets worse, though – the government has injected an excessive amount of money into the system over the past few years. They created more money out of thin air during the last two years than in the last few decades, and pumping money into the system like this devalues the dollar even further. Keep in mind, that when a government prints too much money, it can become worthless.

Even foreign nations are realizing that the dollar is not strong, and they are hesitant to put money into the U.S. economy. In addition to this, the rise of the BRICS nations has the potential to decline the U.S. dollar even further.

Printing too much money, like they have, causes inflationary pressure. The end result is that we are in an unstable economy with a dollar that’s plummeting in value as high inflation hangs over our heads. All the while, our wealth is being threatened if it’s not in a secure investment vehicle. So, when considering this economic turbulence and high inflation, it’s evident that placing your hard-earned funds into anything associated with the dollar or the economy could be a risky move.

401k Retirement Funds Can Tank During Economic Instability

When it comes to investment risk, a great example can be drawn from the height of the COVID pandemic, where many people saw their 401k retirement accounts that are tied to the success of Wall Street tank beyond belief. Some lost more than half their savings, and this led to a great number of people postponing their retirement plans. Also, investors who put their money directly into Wall Street lost thousands and even millions of dollars when stocks fell dramatically. Additionally, those who placed funds in an interest-bearing savings account, which is highly susceptible to inflation, saw its value decrease over the past few years, when their goal was to have it rise in value.