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Omny | iTunes | Google Podcasts | Spotify
In today’s episode, I’m going to talk about inflation, how it’s measured, the difference between supply-driven and demand-driven inflation, the concept of personal inflation and how to reduce it in your own situation.
It’s a little depressing to see that the real cost of things is going up more than the actual CPI here in Australia but when it comes to property investing, there’s certainly a way for you to make inflation work in your favour.
You’re not only going to benefit from the inflation, reducing your relative debt value, but you’re also going to have real demand pushing the price of the property up as well.
There’s so much to learn from this episode, so let’s go inside!
Resource Links:
- Join the Perth Property Investment Facebook Group (https://www.facebook.com/groups/perthpropertyinvestors)
- Join Jarrad Mahon’s Property Investor Update (https://www.investorsedge.com.au/join)
- For more info on our award-winning and highly rated Property Management services that give you guaranteed peace of mind (https://www.investorsedge.com.au/perth-property-management-specialists/)
- For more info on how our Property Sales services can ensure you get the best selling price while handling all the stress for you (https://www.investorsedge.com.au/selling-your-perth-property/)
- Get Jarrad’s strategic advice towards your property purchase and development plans (https://www.investorsedge.com.au/invest-in-perth-property/)
Episode Highlights:
- Intro [00:00]
- What is Inflation? [02:32]
- How Inflation is Measured? [02:56]
- What’s Not Included? [03:45]
- What is Causing Inflation to Be Above Average? [04:20]
- How to Compare Countries Without Inflation [06:55]
- How to Make Inflation Work For You [11:53]
- Buying Right Properties? [15:34]
- Final Thoughts/Outro [17:24]
Thank you for tuning in! If you liked this episode, please don’t forget to subscribe, tune in, and share this podcast.
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Listen and Subscribe:
Omny | iTunes | Google Podcasts | Spotify
Thanks Jarrad,
I have listened to your podcast about inflation and making a property help negate or reduce the impact of inflation.
My situation is that I have an investment property in Melville which is managed by Investors edge, we own the property outright and also the rear block of that property which I have subdivided and have a strata title for the 351 sq. meter block.
I have selected a builder (MyGen homes) and have the plans for a 2 storey 3×2.
I have secured a $367.000 loan through Bankwest who is my current lender on my Secret Harbour 3×2 home. The new build has increased in cost to $425.000 and at the age of 72 years and a retiree with a reasonable Super allocated pension, I am nervous of going ahead with the build even though having owned my 3 Melville properties for many years I am confident the new build would give a good return in a couple of years, however I would need to carry the debt in these uncertain times.
I am particularly disappointed in the RBA inaccurate estimate of the duration of very low interest rates and this has added to my hesitancy !
Would you like to comment ?
Hi George, you are right to be cautious when nearing retirement and it takes careful planning to look at your overall situation and take into account your super, debt, income and needs.
If you send me the floor plans and spec, I can give you some feedback on what it will likely rent for and be worth for sale. I’d suggest you then take those figures to a financial planner to get specific financial advice before proceeding.
This could involve selling the front to then pay debt down on the back new one which is likely to have a greater income and less maintenance to better contribute towards your income in retirement.
I know it doesn’t feel like it but raising interest rates is a good thing and shows that the economy is strong, we will likely have a short term shock but the fundamentals in WA are solid and we are best placed to ride through this.