In today’s world, some investments are trendier than espresso martinis.
Others—like NFTs, metaverse real estate, MATIC tokens, and the solana blockchain—might have merit. Yet they’re either cryptic, enigmatic, or esoteric.
Do you know the difference between CEX, DEX, and DeFi? What are your collateralized bond obligations (CBOs) backed by?
Let’s forget all that stuff for a minute.
Simple is elegant.
People are willing to pay you to live in your property. I love its simplicity and long-term viability.
Rents have gone up, up, up:
With the way that the Bureau of Labor Statistics collects data from 50,000 landlords and tenants, there are lag effects here.
That’s one reason why I expect the level of price increases to moderate down from this hot 8.6% annual rent increase.
America has massive amounts of new apartment building construction underway, and less single-family home construction.
With SFH supply expected to stay low, their rents should stay buoyant or keep rising, outpacing larger apartments’ rent.
Let’s make this chart real for you and break down how it builds your wealth.
Say that last year, your income property had:
$2,000 rent
–$1,600 mortgage & operating expenses
$400 cash flow
Here’s what an 8.6% rent increase means to you this year:
$2,172 rent
–$1,600 mortgage & operating expenses
$572 cash flow
Despite this 8.6% rent increase, your cash flow just increased 43%. Extrapolate that effect across your entire portfolio!
This is 43% more dollars that you feel in your pocket every month.
How did this happen?
It’s because your principal and interest payment stays fixed. That’s your biggest expense. Inflation can’t touch it.
Now, in reality, it might be like 30% more dollars in your pocket monthly. That’s because property tax, maintenance, and insurance costs are often roughly indexed to inflation.
Employers don’t give employees raises like this. That’s why I say that when you control assets, you can give yourself a raise.
You’re not gouging tenants. You’re charging market rate.
This is how investors build fortunes, especially in high inflation.
I just described the third crown of the Inflation Triple Crown to you.
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