We all know the term but how does this impact us? Think of it like this; the more quantity you have of something, the more common it becomes, and therefore the less valuable it is. As the government is forced to print more money to help the economy from completely crashing during this pandemic, we are likely to see inflation occur. Essentially the price of things increase because the value of the thing being used to purchase it (money) decreases in value as more of it is printed and thrown into circulation. Normally, the rate of inflation is around 3% per year, but it has the chance now to be even higher than that with all of the bailouts the government is forced to supply to businesses and with expensive efforts in overcoming Covid-19. This is something that is important to remember when it comes to real estate investing. Real estate values tend to rise with inflation, making it a good investment during this time. In the BRRRR book by David Greene, he frames it differently when he says to “think of your investment as an item you plant in the dirt”. Hopefully that investment starts to grow over time, but a rising inflation is like a rising tide. If your plant doesn’t grow faster than the speed in which the water is rising, the water will eventually overcome it. Real estate acts like a buoy in the water, rising along with inflation. Inflation increases the value of a property, but it also increases rent prices as well.  This is an example of what we call market appreciation, and that is why real estate is a great ‘hedge’ against inflation. I think this is an amazing analogy and paints a great visual of how this occurs.