Does hyperinflation negatively affect the real estate investor?
Real Estate is considered one of the few asset classes which have an inflationary hedge. Meaning people who already own real estate will see solid appreciation. Meanwhile if you have fixed interest rate loans your debt will not increase and your financial ratios (debt/equity) will improve. Rents are likely to go up along with expenses. The bad news is that your property becomes very difficult to liquidate since interest rates are too high for buyers. Vacancy can sometimes increase, depending on your region. Overall the short term affects are usually positive for real estate owners. In the long run a drag on the consumer creates economic turmoil which ultimately is bad for everyone. As an economic commentator I disagree with the doomsday reports expecting hyperinflation. The reason is that other countries are generally in worse shape than the United States and it is in the best interest for our foreign lenders to keep the American consumer happy and buying. China has learned from this l
