My cup is half full viewpoint...
With all the recent talk of the BOC holding interest rates steady, and more importantly the insinuations that inflation is creeping into our economy, I couldn't help but think of how that will affect real estate, and especially what this blog is about, investment properties.
Inflation is not all bad. Yes interest rates "may" go up. Yes our utility bills ( not to mention gas...) will go up. But here is my optimistic side kicking in again. Inflation slows down first time buyers from purchasing new homes. Which affects vacancy rates ( they go down because they stay renting), which affects rental rates ( they go up, because these first time buyers are remaining as renters).
Now here is one last far fetched positive inflation tid bit. Investment property values will go up. If landlords play their cards right and increase rents based on market demand, that will in turn increase incomes which will in turn increase the value of investment properties ( of course that implies keeping expenses in check)
Now aren't you glad you bought that investment property recently?
Mark Vosylius
www.manainvestments.com Investing in Canadian real estate since 1989 in the Barrie, Orillia, Georgian Bay, Midland Collingwood and the Muskoka's.
www.sixstepstosuccess.com Committed to helping you achieve your goals and success in life
Professional Real Estate Group. Our focus is investments, management, education (sales training). We are always looking for other real estate professionals to work with
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There's always a silver lining! Keep up the good work in pointing it out!
This market seems to be defying conventional wisdom for now. But, rents are stable right now with values dropping in our area. While we expect rents to go up, that may not be true in some areas as energy prices are causing people to change locations to be closer to the city center. That means some area will benefit and some will suffer no matter what happens with inflation. This is a complicated time for real estate.