 A lot changes in 7 years, especially in the real estate world. In September of 2017, we published an article detailing how to upgrade from tenant to homeowner.
Back then, the journey from being a tenant to becoming a homeowner was relatively straightforward, driven by historically low-interest rates and a more favorable housing market. With a $1,200 monthly budget for a mortgage payment, one could secure a mortgage of about $250,000, making homeownership an achievable dream for many. Fast forward to 2024, and the landscape looks quite different. Rising interest rates, increased living costs, and tighter housing inventory have reshaped the real estate market. Let’s compare the numbers and see how the path to homeownership has evolved. Real Estate in 2017 vs. Affording a House in 2024: A Side-by-Side Comparison Monthly Budget and Affordability
Interest Rates and Mortgage Affordability The most significant change between 2017 and 2024 is the increase in mortgage interest rates. In 2017, the rates were around 4%, allowing buyers to stretch their budgets further and purchase homes at higher prices. In 2024, with rates rising to about 7%, potential homeowners find their purchasing power significantly reduced. This difference translates into a decrease of roughly $90,000 in mortgage affordability for the same monthly payment amount. The Role of Clark Real Estate in Today’s Market Navigating the current real estate market can be challenging for both tenants looking to transition to homeownership and landlords seeking reliable tenants. This is where Clark Real Estate steps in, offering expertise and support to help clients make the best decisions in a shifting market. For Potential Tenants Clark Real Estate understands the complexities of today's market and works closely with tenants to explore all available options. Whether you’re interested in making the leap to homeownership or finding a rental property that aligns with your long-term goals, Clark Real Estate provides tailored guidance on:
For Potential Landlords In a competitive rental market, landlords are looking for ways to maximize their investments while ensuring stable, long-term tenancies. Clark Real Estate supports landlords by:
Adapt and Thrive with Clark Real Estate The real estate market has evolved significantly from 2017 to 2024, with increased interest rates and living costs presenting new challenges for both tenants and landlords. Whether you are a potential homeowner adjusting to the new financial landscape or a landlord seeking to navigate the changing rental market, Clark Real Estate is here to help. By providing comprehensive support, tailored advice, and in-depth market analysis, Clark Real Estate empowers clients to make the best decisions in today’s climate. Reach out to Clark Real Estate today to explore your options and find the perfect property that meets your needs in 2024.  Image by DC Studio on Freepik Launching a career in real estate development offers lucrative opportunities as well as unique challenges. To excel, developers must engage in careful planning, adopt strategic approaches, and effectively navigate complex market landscapes. Understanding the intricacies of financial planning and staying attuned to market dynamics are the initial steps to building a solid career foundation. Today, Clark Real Estate shares some tips to help aspiring developers position themselves for success in the competitive real estate industry.
Establishing a Financial Foundation Before diving into real estate development, you need a solid financial plan. Assess your available capital and potential financing options to determine your budget. Understand your financial limits and avoid overextending yourself. Proper budgeting ensures you can cover unexpected costs and keep your project on track. Having a clear financial roadmap helps you manage your resources efficiently and make informed decisions. Enhancing Your Skills with a Business Degree Getting a bachelor's of business administration degree can significantly boost your career. It helps you build essential skills in areas like accounting, business, communications, and management. With online degree programs, you can easily balance a full-time job while studying. Look for programs that fit your schedule and career goals. Keeping up with your education helps you stay competitive and improves your ability to handle complex projects. Understanding Housing Market Trends Staying informed about housing market trends is crucial. Analyze market data to understand current pricing, demand, and supply dynamics. Knowing these trends allows you to set competitive prices and make strategic investments. Market knowledge helps you predict future changes and adapt your plans accordingly. By staying ahead of market trends, you can maximize your profits and minimize risks. Navigating Local Regulations Reviewing local laws and ordinances is a must. Each area has specific regulations that can impact your development project. Understanding zoning laws, building codes, and permit requirements ensures compliance and avoids legal issues. Consult with local authorities to stay updated on any changes. Being well-versed in local regulations helps you navigate the bureaucratic landscape and keeps your project on schedule. Leveraging Professional Expertise Engaging skilled professionals such as attorneys and surveyors is crucial to the smooth execution of any development project. Attorneys ensure legal compliance and assist with contract drafting, while surveyors analyze land boundaries and site specifics, crucial for minimizing project risks. Take time to research and scrutinize potential professionals who can help you on your journey. Analyzing Site Characteristics Thoroughly analyzing site characteristics is crucial for successful development. Assess the location, size, topography, and other physical attributes of the site. Evaluate the accessibility, proximity to amenities, and potential for future growth. Understanding these factors helps you determine the suitability of the site for your project. A comprehensive site analysis guides your planning and ensures your development meets market needs and regulatory requirements. Crafting Detailed Contracts Prepare comprehensive contracts with all subcontractors hired during development. Detailed contracts outline the scope of work, timelines, payment schedules, and responsibilities. Clear contracts prevent misunderstandings and disputes, ensuring smooth project execution. Regularly review and update contracts to address any changes or unforeseen issues. Effective contract management maintains transparency and accountability throughout the development process. How to Thrive in Real Estate Becoming a successful real estate developer requires meticulous planning, market awareness, and professional expertise. You can navigate the complexities of real estate development and achieve long-term success by establishing a solid budget, understanding market trends, effectively marketing your development, enhancing your skills, and following the other tips above. Start your journey with these essential steps and build a prosperous career in real estate development. Clark Real Estate is here to help beef up your real estate portfolio. We look forward to hearing from you!  Cork and Rick Clark grew up in Reno, Nevada, watching their father build and invest in real estate. They felt fortunate to not only enjoy the direct benefits but also have the opportunity to learn about real estate investing from an early age.
"He paved the way and showed us the financial rewards," Rick shares. "Pops taught us the importance of a strong work ethic. If you want to be successful, you need to be on the job every day." The Clark family motto--if you are going to reach a particular goal, you MUST be consistent by being on the job and working diligently every day—helped the brothers navigate the challenges of the 2008 market crash and led their property management company into record-breaking growth and momentum. Today, Cork and Rick have used their deep knowledge of real estate, expertise in construction, and their relentless drive to build Clark Real Estate to over 900+ doors (households) under management. Their favorite part of managing properties and real estate investments is that every day is different—every project is different, every house is different. They get to problem-solve daily, whether from the office or out at a construction site. Their father and uncle, now in their 80s, modeled how to successfully work as brothers, and they have enjoyed working as a team ever since. "Knowing somebody's got my back and that we have the same goals is the best part about working with my brother," Cork says. Rick is the second of seven children, and Cork is the younger brother as the fifth child. The Clark brothers got started in real estate investing and property management through the construction industry. They have been in the construction industry since they were teenagers. With their construction experience, "we could visualize firsthand all the possibilities," Rick says. "We would look for the biggest problem property in a neighborhood," Rick remembers. "We would make offers on properties that weren't even for sale." It wasn't long before the brothers had a handful of renovated properties that needed management. This led them to start a property management company, eventually taking on leasing and maintenance for other real estate investors. "No one knows the community better than we do. We're lifers," Rick smiles. "We're hands-on. We've started from the ground up. There are very few aspects of the real estate and investing game that we have not experienced firsthand," adds Cork. Clark Real Estate brings drive and enthusiasm to those looking to invest in the Reno area. Ready to make your mark in Reno's real estate market? Contact Clark Real Estate today to discover how we can help you achieve your investment goals with confidence and expertise!  While many people continue to enjoy the benefits of increased take-home pay due to the Tax Cuts and Jobs Act (TCJA), understanding how the Act affects mortgage interest deductions remains crucial. The TCJA increased the standard deduction, which has eliminated the need to itemize deductions, including mortgage interest, for many taxpayers. However, if your total itemized deductions exceed the standard deduction amount ($13,850 for individuals and $27,700 for married couples filing jointly for 2024), it's essential to understand what is allowable under the current rules. Here is a summary:
While this is not a comprehensive list of all changes, it should provide guidance in making decisions about refinancing or purchasing a home. There are various methods for calculating allowable deductions, so consulting a tax professional for specific advice regarding your situation is advisable.  Clark Real Estate, Investments, and Property Management offers some practical tips to help you reach your health, wealth, and happiness goals for the New Year by making a few adjustments to your home!
1. Clear the Distractions Have you ever noticed that you get a boost of creativity or energy when you’re on vacation? It might not just be the change of scenery but also the clutter-free environment of a hotel room—clean floors, made beds, and no piles of paperwork in sight. In a clutter-free space, you can think more clearly and move more freely. Imagine if your home always felt like that! Start with one distracting room or closet, and rethink it as if you’re preparing for a 30-day trip: What items would you need to take with you? Pull those essentials out, then move the rest. You can experiment by packing the non-essentials in a suitcase, distant closet, or the garage. This allows you to see if life feels more enjoyable without the clutter. If you’re ready for a more dramatic change, consider donating items to a local shelter or thrift store. Continue decluttering each room of your home weekly or monthly. The more you clear, the easier it becomes—you’ll start to feel the positive effects of a distraction-free home environment. 2. Turn Your Home Into an Investment Robert Kiyosaki, author of Rich Dad, Poor Dad, points out that a home can be a liability if you're spending more on it than you're making from it. Many people assume that because their home may be increasing in value, it’s automatically a great investment. Unfortunately, the math doesn’t always add up! The Reno area is currently experiencing an exciting growth period, and those who have invested in rental properties are likely to achieve their wealth goals sooner rather than later. You can turn your home into an investment by finding creative ways to generate income from it. How? If you own your home, you might rent out a room, your garage as a storage space, or even your driveway for parking. Platforms like Airbnb and VRBO allow homeowners to earn extra income from their unused guest rooms or dens. If you're not comfortable sharing your space, schedule a consultation with us to explore purchasing an income-generating property that suits your needs. For renters, there may also be opportunities to generate income from your current space. Just make sure to check with our office to ensure your ideas comply with your lease agreement! If you're considering remodeling projects, feel free to reach out to us. We can help you determine which upgrades will provide the most value if you decide to sell or rent out your home in the future. 3. Tune In to Your Home’s Needs Take a day to observe how you feel when you wake up, walk through your home, leave the driveway, and return. What parts of your home make you smile? What feels frustrating? What can be fixed, and what can you let go of? When parts of our homes are in disrepair for extended periods, it not only affects our mood but can also reduce property value. Is there a strange smell in the cupboard? A crack in the wall? A dim light bulb? Address these issues immediately to keep your home in good shape and maintain your well-being. If you’re feeling frustrated with your current home, it may not just be a maintenance issue—it might be time for an upgrade! At Clark Real Estate, we specialize in connecting the right tenants with the right properties and matching investors with the best investment opportunities. If your home no longer meets your needs or you’re looking for something new, let's talk! We have a growing inventory of options tailored just for you. Learn what questions to ask your prospective tenant’s references in order to find the best tenant for your rental that won't cause trouble down the line!  Choosing to let someone live in your rental is always a risk. If they cause considerable property damage, then you’ll definitely fail to turn a profit. In order to avoid this, it’s important to know what questions to ask your prospective tenant’s references. Do they have any pets or bad habits? The very first of the questions to ask your prospective tenant’s references is whether they have any pets or bad habits. This is a question you can very easily slot into the conversation, whether you got a personal reference, a work reference, or a reference to one of their previous landlords. The latter, of course, will provide the most reliable information. This is especially important if you are renting to tenants with kids since they can be tempted to try to work around your ban on pets by hiding them from you.  Always be firm with your pet policies. Are they violent or cause problems? This is another one of the questions to ask your prospective tenant’s references, irrespective of who they are. Friends and family will hesitate to say anything negative about them, but even their hesitation reveals a lot. Naturally, if their boss or previous landlord does reveal a tendency for problematic behavior, you should immediately give up on leasing out your rental to them! Even if they claim the person has changed since then, there’s a chance that they’ll revert to their previous behavior. And you do not want to risk your rental in this manner. What’s their social life like? While it may seem like an odd or innocuous question, this is very important. You need to know whether your tenant will feel compelled to organize parties or large social gatherings. While they are not an issue per se, frequent parties or too much alcohol can still lead to serious damage being inflicted on your property. And, if you are renting to roommates, it is doubly sure to check both of their references for this potential pitfall. When people room together, the scale of the social gatherings can grow and increase the potential for your rental to get damaged. Do they make their payments on time? This is a question you need to ask the landlords listed on your potential tenant’s references. Their rent payment history immediately reveals whether you will have problems with getting your payments regularly. Of course, some allowances should be made. Running late once or twice over a period of five or six years is more than okay. But, if they have a tendency to run late often, or ask for frequent extensions, then your own budgeting suffers. You won’t be able to rely on their payments, and that might not be something you want to deal with. What can you tell me about their personality? This is a question you want to ask the employer or landlord of your potential tenant more so than their friends or family. Family or friends tend to view problematic personality traits far more leniently than they should. A former landlord, however, can attest to the quality of their character more reliably. You do not want to rent out your property to someone confrontational. Or someone who makes an issue out of everything. Once a lease has been signed, you are more or less stuck with them, so make sure they have a personality you can stand for the duration of the lease. Did they take care of the rental properly? This is perhaps one of the most important questions to ask your prospective tenant’s references. Of course, the only ones who can attest to this are their past landlords. If they haven’t had a previous landlord, and you have their parents as one of the references, you should ask them about the condition of their room at home. The question may seem humorous, but if answered honestly, it can give you a lot of information. Failing that, you can always ask about their tidiness and cleanliness at work. This, too, can provide you with some insight into how they’ll treat your rental. Were there any unexpected issues? We have here another question aimed at former landlords. If they ask for clarification, you can ask if any repairs were suddenly needed due to damage inflicted by the tenant. Some damage can be accidental, such as stains or scratches. However, if they’ve broken an appliance or a piece of furniture, it can hint at something worse, even if it was carefully disguised as an accident. If they have a history of breaking things, you probably want to remove your better furniture and decorative pieces. As the experts from hansenbros.com love to point out, they can stay safe in storage for as long as needed.  You need to protect your property since it’s the source of your profits. Did your other tenants have any complaints about them? One of the best ways to gauge whether a tenant will be problematic is to ask about the complaints of their neighbors. If their former landlord or neighbor can attest that there were no problems, you can rest assured. If there were a qualified property manager looking after the rentals, they’d also be able to provide a lot of pertinent information on this subject. However, you probably don’t want a combative tenant who might disrupt the lives of your other tenants on your property.  Never sign a lease until you know the tenant is a good fit. Would you let them lease your rental again?
The final of the questions to ask your prospective tenant’s references, if they’re a landlord, of course, is whether they would let them live in their rental again. There is no better way to check whether you want to let them lease out your property. If the answer is no, then even if they’d offered nothing but praise for the tenant previously, you can be assured there was something they’d held back. Carefully selecting the right tenant for you By using the questions to ask your prospective tenant’s references well, you’ll be able to find the perfect tenant for your rental! What ‘perfect’ means is different from landlord to landlord, of course. So, make sure to throw in any additional questions you believe are important to you! Picture Links: Unsplash Unsplash Unsplash Unsplash  If you're thinking about renovating your home, there are a few things you should know before you get started. From understanding the different types of renovations to budgeting for your project, this guide from Clark Real Estate will give you an overview of what to expect when it comes to renovating your home.
Different Types of Home Renovations There are many different types of home renovations, from small cosmetic updates to major structural overhauls. Some common home renovation projects include:
Establishing a Timeline and Schedule Once you've decided on the scope of your project, it's time to establish a timeline and schedule. This will help you stay on track and ensure that your project is completed on time and within budget.Some factors to consider when creating your timeline and schedule include:
Budgeting for Your Renovation Next, you'll need to create a budget for your renovation. This will help you keep track of all the costs associated with your project and ensure that you don't go over budget. When budgeting for your renovation, be sure to factor in the cost of the following:
Software Used by Contractors These Days Contractors today use a variety of software applications to manage their projects, including project management software, accounting software, and CAD (computer-aided design) software. Certain specializations also have their own specialized software. All in all, by understanding which software applications your contractor is using, you can better communicate with them and stay up-to-date on the progress of your renovation. How to Find Capable, Trustworthy Contractors Once you've established a budget and timeline for your project, it's time to find capable, trustworthy contractors who can get the job done right. Here are some tips for finding reputable contractors:
Clearly Communicating Your Ideas One of the most important aspects of any home renovation is clear communication between you and your contractor. After all, they're the ones who will be responsible for bringing your vision to life! Make sure you take the time to sit down with them and clearly explain what it is you're looking for before work gets underway. Putting your ideas in writing is advisable, as well. If you like, you can start in Word, then save the files as PDFs so that they can be easily accessed on different devices. If you want to join various PDFs together, you can do so in seconds by selecting a PDF merger tool that you can use for free. Getting Permits Depending on the type and scope of your renovation, you may need to obtain certain building permits before work can begin. Your contractor should be able to advise you on which permits are required for your project. Adding a Home Office With more and more people working from home these days, it's no surprise that many homeowners are looking to add a dedicated home office space as part of their renovation plans. If this is something you're considering for your own home, be sure to factor in the cost of additional electrical outlets, internet hookups, and any other special features that may be required. The Benefits of a Home Warranty Finally, one last thing to consider when renovating your home is whether or not to purchase a home warranty. This type of insurance protects against unexpected repairs or replacements that may be needed after the completion of your renovation project. While not required, a home warranty can give you peace of mind knowing that your investment is protected. Now that you know more about what to expect when renovating your home, it's time to start planning YOUR dream renovation! Just remember: careful planning, clear communication, and staying within budget are key to ensuring that your project goes off without a hitch! Clark Real Estate offers a variety of property management services for landlords and tenants alike. If you have any questions, please let us know. Image via Pexels  Flipping houses can be a great way for aspiring students to earn money for college. With a little hard work and a bit of luck, one can turn a profit from buying an inexpensive fixer-upper and selling it at market value. Investing in the real estate market requires careful research and savvy knowledge of the industry, but with dedication and persistence, flipping houses can become a lucrative investment that pays off in more ways than one.
Find the Right Home to Flip One of the most important steps in real estate investing is finding the right home to flip. It can be hard to determine which properties are worth your time and money. However, there are several factors you should consider when evaluating potential flips. You should look at a property’s location, condition, zoning, and comparable prices. Also, consider housing trends and research what similar properties have recently gone for on the market. With a little diligence, you'll be able to find the perfect property flip. Check the Zoning When looking for a house to buy and potentially flip for a profit, it is important to research local zoning laws. Every county or municipality may have different regulations which could prevent or limit renovations, additions, or other changes that could affect the value of the property. By checking with the local zoning laws first, potential home flippers can save themselves the heartache of a bad deal. Call the Pros Even if you have experience in home improvements, it's still wise to hire professional contractors for major projects such as plumbing, electrical work, structural changes, and more. Skilled professionals will get the job done correctly and safely while ensuring that your renovation project complies with all applicable laws and regulations. Make It Sparkle When you're ready to put up your property for sale or rent, don't forget about deep cleaning. A good vacuuming and decluttering will already go a long way. This is an often overlooked step, but it can make all the difference when it comes time for potential buyers or renters to tour your home since they'll appreciate seeing how well-maintained everything is from day one. Plus, deep cleaning before listing will give you an edge over competing listings on similar properties nearby. Market Your Property When it comes to flipping a house, successful marketing can be the difference between making a profit and taking a loss. Utilize all available channels to get the word out about the property, such as listing it on online real estate sites, reaching out to local Realtors for referrals, and utilizing social media platforms like Facebook and Instagram. Host an open house or organizing events at the property to generate interest. Invest in professional photography, staging, and open-house support to increase visibility. Additionally, make business cards, which can help spread the word about your listing quickly and easily. Make sure your cards include information about what makes your property unique, such as its location or amenities included in the sale/lease agreement. Alternatively, reach out to Clark Real Estate. We can manage your property for you in the Reno and Sparks areas. Study Online to Save on Costs If flipping houses isn't enough money for school tuition, you can always take classes online. Whether you want to earn your bachelor of education or your master's in accounting, virtual learning has become popular in recent years due to its convenience and flexibility when compared to attending full-time in-person classes. Moreover, online degree programs can cost significantly less, which means your tuition budget goes further. Flipping houses to help pay for college can be a lucrative undertaking. With careful research and planning, it can be an incredibly rewarding venture both financially and emotionally. Whether you're looking to pay off student loans or save up money for tuition costs at college, flipping houses can be a great way for adults to return to school after years away from the academic world. Image via Pexels  Buying an investment property in Nevada is a financially wise decision. And not only because it's a valuable asset that can provide you with a significant passive income. On top of that, it can be a stress-free occupation. You can run a rental business any way that suits you. However, to ensure everything goes smoothly, it's better to choose the location carefully. Both local and long-distance landlords face different challenges and enjoy different benefits. Before you decide, it's best to consider both options. With that in mind, we've decided to examine both possibilities and help you make the right choice. So, local vs. long-distance investing: which is better for Nevada landlords? How to make the right decision? Firstly, before you start searching for the right property, you need to ask yourself a few questions. Knowing the answers will help you make up your mind and make a sound decision. So, ask yourself the following questions:
So, what are your financial goals? Do you want to get out of debt, gain independence, or accumulate wealth? To answer this question, you need to first assess your current finances. Then visualize where you want to be in the next five, ten, or twenty years. Knowing this will help you focus your investing in the right direction.  Before you decide, you need to consider your financial possibilities and goals. Choose the right market Next, you need to decide on the right market. For example, you might want to have a high rent-to-value ratio. In that case, you should choose a cash-flow market that will provide you with valuable income. Or, if generating the cash flow isn't your priority, you might want to choose a market with a potential for long-term appreciation. Lastly, hybrid markets offer a mix of both options. Of course, what you decide on depends on your long-term goals. Self-management or using property management? To determine your real estate strategy, you need to answer this question. Maintaining the property and dealing with tenants can be pretty overwhelming at times. From the potential renovation of the property to tenants losing their keys for the n-th time, self-managing demands a lot of effort and work. However, some landowners prefer to be in charge and gladly take on these responsibilities. If that is the case with you, there is no dilemma. In local vs. long-distance, local investment property is a clear winner. On the other hand, if you'd rather hire a third party to manage your property, both options may work for you. In that case, the key is to find an experienced property management company you can rely on. Whether you choose a local or long-distance property, you'll be able to save both time and effort while they manage your rental business for you.  When considering local vs. long-distance investment, it's crucial to decide on property management. Local investment property Now, let's have a closer look at what you can expect from buying a local investment property. Familiarity with the market The first and most obvious advantage is that you're more likely to be familiar with the market when you're investing locally. Every local market is unique, and knowing little flows and trends can help you invest in the right property. You'll know all the local attractions and amenities that are likely to attract tenants. However, doing proper research is still a must. You'll have more control This is crucial for many landlords in the local vs. long-distance dilemma. While it's not impossible to manage your property long-distance by yourself, it's certainly more demanding. On the other hand, you can choose a more hands-on approach as a local landlord. For example, you can meet with your tenants when necessary, show your property in person, and perform an inspection of the property. You can hire local contractors when necessary When you delve into investing in real estate, you're bound to need contractors at some point. Whether you want to remodel that fixer-upper or need some repairs, finding the right contractors locally is much more manageable. Firstly, you can choose them yourself and ensure they're suitable for the task. Secondly, they're less likely to try and take advantage of your absence.  Before you buy an investment property, carefully consider both options. Long-distance investment property
However, long-distance investments also come with their own set of advantages and drawbacks. Let's have a proper look. A wider range of investment opportunities Depending on where you live, your local market might not be able to offer you what you want. What if you need cash flow but live in an appreciation market? On the other hand, if you don't limit yourself, you can opt for a more profitable market with a higher return on investment. If you find the right property in other parts of Nevada, you might even want to relocate there! If the business proves very lucrative, this might be an excellent idea. However, if you want to live nearby, ensure you plan your long-distance relocation with care. From packing your belongings to hiring trustworthy movers - many tasks will require your attention! Use a property management company Of course, you can do this on a local level, too. However, limiting yourself may lead to losing some excellent opportunities. And if you plan to hire property managers in either case, a long-distance investment can be a better choice. There are many reasons to hire property managers! Although it may seem a more expensive option at first, it can save you money in the long run. Especially if you don't have a lot of experience - they'll ensure your tenants are satisfied and your property in good condition. You can use your property for a variety of purposes While your goal is mainly to rent your property to tenants, you can also use it as a vacation home in between. Or, your kids can use it when they start college - no accommodation worries! And lastly, you might choose to relocate or retire there someday. The bottom line As you may see, there are many things landlords should consider when it comes to local vs. long-distance investing. Both options come with their unique advantages and issues. However, once you know your long-term goals and preferences, you'll be able to make the right choice. Meta description: Buying the right investment property is not an easy task. Find out which is better for landlords - local vs. long-distance investing!  What goes up must come down. That adage is true when it comes to throwing a ball or hot air balloons, but what about rising prices? History tells a different story. You don't need to be an economist to know that prices for most products are more on a continuum trending upward with only slight and temporary dips. Inflation is a result of supply and demand. When there is greater demand than supply prices will increase. When there is a oversupply of products, the cost typically goes down albeit not necessarily lower than a previous average. Anyone that has filled their vehicle with gas over any period of time knows that gas prices fluctuate with the seasonal ups and downs directly related to usage by consumers and how much is available in the world. Inflation not only affects the price of gas and groceries, but also housing prices. The price of building a new home is related to the supply of construction materials. When the cost of building a new home is prohibitive, there is more demand for existing houses. Which, in turn drives up the sales price of an existing home. Other factors can contribute to home prices such as interest rates or the availability or affordability of low cost financing. Again, supply and demand is what pushes inflation to the record levels we've recently seen. Here is what many in government see as a benefit to inflation: The cost of paying back debt is actually lower when the debt was incurred prior to inflationary increases. If inflation devalues our money by say 10% it means that the debt represents a lower percentage of the income needed to repay it. If inflation pushes prices to 50 or even 100 percent, the pre-inflation debt seems insignificant. That is possibly one reason that many in congress don't seem to be concerned about inflation. One key to surviving inflation is to hold on to assets that rise in value with inflation. Cash is not a good hedge against inflation because it continually takes more of it to buy goods and services. Real Estate, precious metals, and durable goods that remain in demand in any economy historically provide protection better than most liquid assets. While high inflation rates may subside when demand and supply are corrected, prices typically level off but do not decline. That makes investing in real estate, for example, fairly safe. Landlords rarely lower the rents when inflation cools off. A shift to new construction could occur if materials become more readily available, but the existing homes hold their own. Understanding inflation can help you make better choices about what to invest in and how you can benefit from what can be negative affects.
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Clark Real Estate
305 W. Moana Ste C Reno, NV 89509 (775) 828-3355 Reno Property Management
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