You might have noticed that we’re in an interesting time, financially. We’ve got asset deflation and monetary inflation—assets decreasing in value and dollars that offer temporary strength. This, as Jason Hartman has said before, are great times for the investor. Now is the time to exchange a temporarily inflated dollar for real, hard goods with universal demand. Lock in great mortgages. Invest in real estate.
While we’re talking about assets and monetary instruments, it is important to establish some ground rules. Land is an asset, and it is decreasing in value in many places. Jason Hartman doesn’t trust land—it’s speculative. There’s never going to be more land—all real estate has been found. While there will be more stocks, more money, more oil wells, all land on Earth has been catalogued, mapped, and documented. Land value is under pressure of decline.
But real estate is more than the value of the land, so it is what Jason Hartman recommends. His recommended properties focus on the packaged commodities of real estate, and most come with very little land, making them less speculative.
The improvements, sticks, bricks, wire, glass, steel, lumber, labor, energy, petroleum products—those are the things that are ever-increasing in value. They’ve got the pressure of 3.5 billion (and counting) consumers. The United States population is thought to be increasing by 100 million in the next 30 or so years. In 40 or so years, it is expected to grow by 3.5 billion individuals. These won’t be a new kind of people—they’re still going to consume packaged commodities.
This is great for you, the investor! Rent will go up. Though you may have experienced a temporary decrease in rent due to the temporary influx of housing, this is a problem that’s bound to autocorrect, and quickly. All of these new people need a place to live. And Gen Y is in the prime of their renting years, which helps create upward pressure on rents.
If you buy when others are afraid to, you’ll come out ahead after just a bit of patience. People buy when the media tells us that the housing market is booming. Beat that crowd. It takes a while to build homes, so there may not be enough if you wait for the perfect time. A house is a complicated structure and it takes a bit of time to construct.
Act in anticipation of a population increase and subsequent housing shortage, and begin building your wealth today.
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The Jason Hartman Team