The topic really is about how to protect yourself against inflation, it just didn't sound that catchy, but in a way, you are paying yourself.
This is great and all, but what will the true cost of all this be besides an increase in taxes? I don't claim to be an expert, but I believe with all the printing of money that is going on in Canada and across the world we are set to experience strong inflationary pressures.
The Government of Canada in the past has tried to maintain the inflation rate at 1%-2% per year, they control the inflation rate with interest rates. Prior to a few weeks ago the Bank of Canada(BOC) would try to target 2% inflation, which means adjusting interest rates before it hit 2%. However in releases a few weeks ago they have now changed their wording, saying that they will not adjust before it hits 2%.
This is great news for people looking to get a mortgage, the historically low rates will be here for some time, some people are predicting as far out as 2023 before rates increase.
I'm not an economist or a financial advisor, please consult with your own professionals in that respect, however, I do care about you, and as a Real Estate Agent I want to give you information that I see to help you succeed.
We have likely all heard our parents and grandparents tell us stories, that you could buy a coke for a nickel or the stories I tell my kids are that I used to be able to buy one cent candies, (how do I even explain to my children what one cent is now that there are no pennies). The inflation we may see down the road, I don't know if anyone knows the full picture, however, it might mean that something you buy today for $5, 5 years from now could be worth $10 and 10 years from now could be worth $15.
How can you protect yourself from inflation? Talk to a licensed financial advisor, I am not one. However, what I am seeing investors do right now in this market, right here in Kelowna, West Kelowna and the Okanagan has put their money into Real Estate.
There are reasons why some of the most wealthy people in the world have made their money through Real Estate as it helps hedge against inflation. As prices go up, so do home and land values. Investors also leverage real estate by owning rentals, property values typically will go up in over the longterm. The rent you charge your tenant can be increased and adjusted with inflation as it increases. With real estate, you can also use other people's money(bank), with low-interest rates it can be a good time for this.
Why does this matter right now?
Real estate can protect you from inflation, while also putting money in your pocket. Do your research. Talk to a Financial Advisor to see what is best for you, but also feel free to reach out if you have any questions on the real estate side of things and how to go about purchasing rental properties.
Have a great day!