Why Real Estate Is A Bad Inflation Hedge

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In this video, I discuss why real estate may be a very poor inflation hedge in a high inflation environment: repair and maintenance costs can increase faster than the value of the house, which could lead to cash flow problems.

Keeping a rainy day cash fund on the side is not a solution either, since the cash will lose purchasing power unless it is stored in Bitcoin.

Skyrocketing property taxes can also lead to cash flow problems and ultimately result in the owner losing the property at the worst possible time.

Unlike real estate, Bitcoin is more:

-- Portable
-- Divisible
-- Resistant to confiscation
-- Easy to store without ongoing costs like property taxes, insurance, and maintenance

Not investment advice! Consult a financial advisor.

Watch this video about Bitcoin and real estate first:

Watch real estate repair and maintenance costs skyrocket:

Billionaires like land as a store of value:

Private property often gets confiscated during a revolution:

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#realestate
#inflation

Disclaimer

[Bitcoin_University]

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[spx]

you: gets btc for 25.000
government: we offer you 2.500.000
you: sell
btc: goes to 250.000.000

don't underestimate the power of printer. don't sell for fiat.

[Riskninjaz]

Get your maintenance and future proofing done.

[MsMyhouse]

As a real estate broker, this is so true. Especially the property tax part. I've seen many senior citizens have to move into rentals or get a reverse mortgage on their home because of property tax increases. :(

[ericsurprenant]

Thanks Matthew for this video! Me and my wife just purchased a house last month and I was thinking of cashing out some Bitcoin to have a larger downpayment to avoid PMI but decided against it. My future growth potential with BTC is far greater than the savings of not paying PMI and this video makes me feel like i made the right decision

[Whatisfreedom]

99% of people don’t understand why BTC is the best store of value to against inflation.

[moneycrab]

We’ve been in a special window of history where real estate has been good. Secular interest rate decline, 10/31 exchange rule to avoid taxes, high leverage, population increase and overall national economy lifted most markets.
But now demographics are changing, interest rates no longer in secular decline. Crime and local government factors increasing local risk.
And once you calculate your cap rate net of taxes for all this you’ll see how paltry the ROI is.

[schlemmermaul]

My wife’s step dad thinks his 4 new rentals (and $2M of mortgages) will beat out my BTC over the long term…glad you made this video bc it captures my thesis exactly. Sailor has also conveyed this same argument many times which strengthened my conviction about this.

[fonebook]

A small tip: You can switch to the next open tab by pressing CTRL-TAB (or Command-W to close the active tab).

[TheZoekie]

I'm in Turkey on a vacation and i see the beach front real estate with bad maintained roofs and bad maintained windows. Even I don't want to buy it while standing outside.

[civicparadox]

Ironically, you picked this day of all days to bring this up.

Today is the day I'm finally closing on my land purchase. Regardless of how well the value of either the land or whatever I build on top of it holds up, it's wealth I would not have had in the first place had I not invested in btc some years back.

I still have plenty btc left over to continue storing wealth, but now I'm going to enjoy some of it too.

[chriso]

I rent out a townhouse and the HOA and maintenance are killers. Darn ice machine cost me $400 to repair. Garbage disposal on off switch $350. It’s always something.

[ExpensivePizza]

I own both. I agree that Bitcoin is a better investment overall, but, real estate has some interesting advantages.
1. You need somewhere to live. At least in my country the math works out better over the long term to own vs rent.
2. Having an investment property seems to pay for itself. The rent pays the loan. The property value is a lot higher than the loan.
3. The bank will happily lend you a lot of money to buy real estate. They won't lend you it to buy Bitcoin. But you can still use that leverage to buy more Bitcoin.
That said, I don't live in Argentina so that experience might be different.

[bujin]

Basically anything that has a carrying cost is risky, and that risk escalates exponentially as the environment you're in destabilizes. Also, real estate is very much tied to the environment, so it's not like you can just move it to where things are more stable (assuming such a place even exists when the need arises).

[jimviau]

One question I have is: How can you pay for daily expenses when the only assest one has is Bitcoin, since not many businesses yet will accept Bitcoin as payment. And if you most sell some Bitcoin for cash, how do you avoid the taxes?

[normanatm]

Hi Matthew,
In your videos, you suggested selling our rental property.
Currently, I have a rental in the Boston area that gives me a positive cash flow of $1500 per month.
Why not keep the rental and use the cash flow towards buying more BTC?

[DestructorEFX]

Hi Matthew, how are you? I have a question for you: I was learning the importance of UTXO management, that one day bitcoin will be adopted by institutions and nations states, the main chain becomes like FED wire, and the fees are expensive for the average people. So it’s important to consolidate small UTXO’s into a bigger UTXO to avoid the possibility of the fee being larger than the UTXO itself, so that It’s no longer useable. But if that happens, bitcoin is losing one of the proprieties of money, that is the ability to easily move value across the world. It could have the same defects that gold had, it was hard to move so it became centralized. What are your thoughts about it?

[al-.W]

Soaring maintenance cost is really spot on where I live (France). With all the new renting laws, poorly insulated places will be removed from the renting market until the appropriate work is done to comply with the new energy consumption standards. With all of the shortages on top of rampant inflation, you can bet a lot of properties are going to wash up on the market at the same time and crash it.

[Emrico]

A good example is, in Turkey, according a new law, home owners cannot make a rise in rent higher then %25.
While true inflation is around %50-100, rent price can increase only %25.

[desmondchin]

Hi, can you do a video on what are the options we have now to borrow against our bitcoin?

Since there were so many lending platform collapsed, right now really clueless which platform is reliable to lend out our bitcoin to spend the fiat

Or else, holding bitcoin without cash flow really cannot enjoy our life. Just seeing profit on paper.