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5 Ways Buying a Home Can Hedge Against Inflation

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The impact of inflation is global. Everyday prices of commodities and fuel are rising raising serious concerns for the public. But if you are a renter, things can be at stake. You are likely to experience a hike in monthly rent as well. Between the elevated costs and the recession in the economy, one may wonder if it is smart to buy a house.

Little do people know that owning a home is helpful against rising inflation. Surprised? Don’t, be. In this blog, we will cover the prime reasons why buying a house during inflation can be beneficial for you. 

Shield Against Inflation 

Economists are of the view that a home brings forth equity and stabilizes the monthly housing cost in the long run. So even if other expenses continue to rise, the value of the home will also grow with time.

Unlike rents, you can keep the house payments stable. The mortgage reliability gives you the edge to calculate the estimated amount due to be paid. Therefore the mortgage rate will not increase, unlike other expenses.  Which is why having a home is in your best financial interest.

Let’s say, you bought a house at Soul City in Lahore in 2023. As of today, the pricing plan will be more affordable than the next year. Because the rates in real estate increase every year, if you buy a house in this community right now, you will have to pay the current rates. Needless to say, it saves the trouble of paying an extra amount. 

Form of Protection 

Once you become a proud homeowner, monthly payments (mortgage) do not fluctuate. The insurance case is similar as well. The cost of insurance will not increase either which again will benefit you financially. Having a stable home in an upcoming grooming community allows a form of protection for you.

As a buyer, you have a healthy asset in your hands. Even if you decide to sell your home later on, it will offer much financial protection and value to you. 

Positive Impact on Value

Are you an investor? If so, you are aware that purchasing tangible assets is in your good interest. But in a time of inflated economy investments such as stocks, can usually have a negative reaction on your budget. The risk factor is also high, which makes investors uneasy to have a commitment.

Real estate investment brings a rare opportunity in times of inflation. The property value will only rise in the coming years. Therefore the property value will appreciate. 

Renting is an Option 

The most ongoing trend in real estate these days revolves around Airbnb. What if you own a second home? Or maybe have an extra but unoccupied floor? You can make use of that property or extra floor by renting it out from time to time. Despite the maintenance cost, it will serve as passive income during inflation. 

People tend to visit metropolitan cities whether they are overseas citizens, or coming all the way for a wedding or vacation. Having such property at hand gives you the advantage to utilize the space as much as you like. 

Reliable Financial Planning

One major benefit of becoming a homeowner is that you can do financial planning with confidence. Because of the fixed-rate mortgage, you can manage the expenses, budget, and other monthly recurring costs for a long period. It offers much stability and a better foundation to manage your finances and be able to plan your next investment as well.

Therefore homeowners have the liberty to save money, plan a vacation or maybe even go for a world tour. No worries whatsoever. Hence the reason, if you prefer to buy a home even with inflation you can.

Owning a Home is Never a Disappointment 

There are other perks too that one can enjoy when they own a home. However, if you are renting at the movement and hesitant to buy a house due to a hike in prices, don’t be afraid. The longer you wait, the more price you’ll have to pay for down payments with increased interest rates. Therefore buying a home in the current market is a good option as you can reap the benefits for the rest of your life.

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