Why Is Inflation Bad for Rental Property?

Chris at Hauseit (https://www.hauseit.com) goes over why inflation is bad for rental property owners. While most people view real estate as an inflation hedge asset, we explain why inflation can also be bad for owners of investment properties.

Save money when buying, selling and renting real estate in New York and Florida with Hauseit (https://www.hauseit.com). Available in NYC, Long Island, the Hudson Valley and South Florida. Established 2014.
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While it's true that rental property owners can try to increase rent to keep up with the rate of inflation, investors need to realize that their own associated costs of owning property can and will likely substantially increase as well.

For example, if you have an investment condo unit, then your common charges might increase substantially to cover increases in costs for running the building. Your property taxes might increase as well as the local government needs more money to provide municipal services.

The cost of your home insurance premium is bound to increase as well, especially with supply chain issues and labor shortages all having an inflationary effect on replacement cost.

Furthermore, if you have a mortgage that is or has become floating rate, then inflation often means the Fed raising interest rates. This means your mortgage interest rate will also go up, costing you more money every month.

And lastly, everything from maintenance to repairs, like the cost of hiring a handyman or plumber will go up in an inflationary environment. So inflation generally isn't good for anyone, even rental property owners!
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Save money when buying, selling and renting real estate in New York and Florida with Hauseit (https://www.hauseit.com). Available in NYC, Long Island, the Hudson Valley and South Florida. Established 2014.

Hauseit Group LLC, Licensed Real Estate Broker
Tel: +1 (888) 494-8258
Email: [email protected]
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