Despite rising interest rates and ongoing inflationary pressure, buying property can be a worthwhile investment. But investors should consider some factors while investing in the current real estate market.
Observe the current rate
The rate of home price growth is 10.8% which is not enough to beat the current inflation rate of 8.5%. Although the home prices are higher the rate is down compared to June 2022. Most interestingly, the rental price is also slowing down. All these rates indicate that sitting idle on the sideline and waiting for a normalized inflation level will not be a wise decision. Rather investors should take market opportunities that are available in the current situation.
Choose comparatively safer buy
Buying property at a low price always motivates investors to earn more profit. However, purchasing a cheap property at a lower price will not increase the chances of greater return. Especially in this changing housing market investors need to emphasize the safer buy that can help you to earn a greater return over the long term. Along with the price of the property always consider the location, existing property law, and expected rate of return of that particular property.
Consider Real Estate Investment Trusts (REITs)
REITs are highly influenced by the inflation rate. Because REITs require high amounts of debt. These large numbers of debts are usually used to leverage their portfolios. Many REITs provide a higher rate of return in the long term. So, investors can consider REITs that provide long-term growth opportunities.