There are lots of myths when people talk about housing. It’s part and parcel of the present discourse on this topic. After all, we live in a time of fake news and mass hysteria.
As a result, we see a lot of clickbait and sensationalist headlines talking about the death of housing or how housing is on the verge of crashing. Overall, the theme of these articles is to dismiss the idea of real estate investing as a viable wealth-building strategy.
Let’s just look at the raw numbers. Yes, before you make any big claim about housing or any economic sector, always do your research. It’s a great habit to get into if you want to be successful in real estate and other fields.
Demographics are destiny in real estate. They shape what people’s consumer preferences will look like.
Currently, there are more people aged 28-34 than in any stretch of American history.
Now if you’ve done any research, you’d find out that 9 out of 10 mortgages have an interest rate below 10%.
Another interesting factoid, 40% of all homeowners don’t even have a mortgage.
Also let’s dispel some myths here. There are lots of financial journals out here that keep talking about a housing crash. They’re constantly drawing parallels to the housing crash of the 2000s housing bubble to dismiss housing as a non-viable investment asset.
Here’s the problem with the anti-real estate doomsayers, they don’t understand the differences between the real estate markets in the present and real estate markets back during the 2000s housing bubble.
To have a market crash, you have to have large amounts of distressed homeowners. That was present in droves throughout the 2000s.
In the lead up to that crisis, many unqualified home owning applicants were allowed to take out mortgages and acquire housing that they could not afford. Under normal circumstances, these people would not have been able to take out a loan, much less become homeowners.
Fast forward to the present, lending standards for housing have been tightened substantially. For example, the average home buyer has a credit score of 776. Similarly, existing borrowers have a FICO score of 751.
In turn, you won’t see as many distressed homeowners. These days, people have more cash than debt.
All told, rents are going to remain high due to the lack of supply and historic demographic driven demand.
So yeah, ignore the doomsayers. Remember, the home is the center of the universe. People will always need housing no matter their economic situation.
If things get economically out of hand, they’ll likely downsize their housing choices or even opt for renting a house. The latter used to be an uncommon practice, but now it has become more prevalent.
Part of successful wealth-building strategies is picking up on new market trends and capitalizing on them. When people are renting properties in droves, these are perfect opportunities for income property investors to acquire houses and rent them out to others for the purpose of generating cash flows.
Let’s face it, the most optimal hedge for inflation is a fixed-rate mortgage.
It’s actually quite simple to see why that is.
When you go to a bank you take out a loan to get yourself a property.
Ideally, you’d buy this property in a stable, linear market that will give you favorable cash flows.
Once you’ve bought the housing unit, you then rent it out to a tenant. In doing so, your tenant takes on the carrying cost of the housing unit.
While you keep this property in your portfolio, your debt gets paid down in deprecated dollars. You can thank inflation for that.
As your debt gets paid down, your house’s value appreciates faster than the inflation rate.
Acquiring an income property in a linear market is one of the cutting-edge strategies to build wealth.
Just think about it. Inflation eats away your debt and your income property’s value outpaces inflation.
This is the red pill of wealth-building that you’ve been deprived of by so many “experts” out here.
The good news is that my 
