Summer is here at last! Maybe you can’t steal away to a beach resort this year and behold the sprawling gold sands and clear blue waters. Maybe you can’t walk along the shore at sunset and fill an empty pail with intricate shells and other seaside wonders. Fortunately, you can still reap the rewards of a strong investment portfolio––and you don’t even have to suffer through scorching sunburn to do so.

What’s more, we can learn a lot from this month’s birthstone (well, at least one of them): the pearl.

How, exactly? Allow me to explain in this newsletter:

Inflation: The Incredible Irritant?

Pearls are so much more than delicate gems that line necklaces or make dull earrings glimmer. Unlike other gemstones that originate from the depths of the Earth, pearls come from living things, more specifically oysters and other mollusks. Oysters don’t set out to create pearls due to some ecological obligation; rather, pearls are the result of debris ending up where it doesn’t belong (a grain of sand, for example): inside the oyster. The oyster responds to the intruder by producing a unique substance called nacre. Before you know it, that annoying little grain of sand is no longer an unwelcome irritant; it’s a smooth, moon-silver pearl sought after for its rarity.

But it’s not the exclusivity of the natural pearl worthy of our attention. It’s the strength of its outer “shell.” Nacre is hailed from its resilience. You won’t be able to shatter a pearl no matter how tight you hold it or how hard you throw it.

When confronted with inflation, real estate behaves similarly thanks to a phenomenon called appreciation. To put it simply, appreciation describes an asset’s increase in value over time. When inflation strikes with great force, many popular investment options struggle beneath its weight. Real estate is different. That’s because even in volatile economic times, people still need safe places to call home.  They may have to forgo high-interest mortgages, but renting remains a reliable option. As a result, the demand for quality rentals rises.

In sum, real estate thrives under unusual conditions––just like a freshwater pearl coming to life layer by impenetrable layer in an oyster’s belly!

Let This Be Your Summer of the Pearl

Summer is always a great time to get a head start on beefing up your portfolio, but this summer may be particularly special. After over a year of keeping their distance from others and staying close to home, people are getting antsy. Like the New York Times said last July, “[People] still feel the need to get away, drawn to the appeal and respite of new — or familiar — sights and sounds and experiences.”

Staring at the same four (or more) walls can breed contempt, leaving more people open to the idea of moving house. Post-COVID, rental occupancies are expected to surge up to 30% and an even bigger increase to revenue performance of 57%. Whether you already own a rental property or are looking to buy, real estate is unlikely to lose its irresistible lustre anytime soon.

So take advantage of the low prices, the willingness of people to change their surroundings, and be ready to sell when the housing market crescendos in a few years. No matter what the economy has in store, real estate can withstand it with its pearlescent exterior!

Enjoy your summer!

A LAUGH OR TWO FOR GOOD MEASURE

HELPFUL LIFE HACK #2

WHY INVEST IN REAL ESTATE?

Appreciation

In real estate, the term appreciation refers to the increase in the value of a property over time. From a macro level, appreciation may result from inflation, increased job opportunities in your market, and overall development in your town. You can raise the appreciation value with home improvements.

Just think about how valuable this is for a real estate investor; if you purchase a home or rental property, its value can increase over time.

This increase in property value or monthly rents can be seen as a profit once you sell your home or as an increase in monthly earnings on a rental property.

It can also be a valuable tool for a homeowner or investor to increase their property value by making a few home improvements.