Bernanke’s Attitude Pointing To Buying Honolulu Real Estate
February 10th, 2010 categories: Rants & Riffs, The Market
The New York Times online is reporting that Fed Chair Ben Bernanke is looking for ways to slow the economy.
“Increasing that interest rate, he said, will have the effect of pushing up other short-term interest rates, including the benchmark fed funds rate – the rate at which banks lend to each overnight.
It is even possible, Mr. Bernanke said, that the Fed “could for a time use the interest rate paid on reserves, in combination with targets for reserve quantities,” to communicate its policy stance to the markets. Since 1994, the fed funds rate has been the much-watched centerpiece of statements by the Federal Open Market Committee, the Fed’s key policy-making arm.” CLICK HERE TO READ THE NEW YORK TIMES ARTICLE
Why would Ben want to slow the economy? Could it be that he sees the “I” word on the horizon? I believe he is concerned about inflation. If inflation kicks in you may want to put your money into assets that appreciate. Real property is a terrific place to consider.
More specifically, you may want to consider buying a Honolulu home or condo as a rental property. Here are the potential benefits.
1. It gives you a hedge against inflation.
2. There is a very limited supply of developable land and, therefore, the lack of possible new housing in core Honolulu means our market is less susceptible to significant value drops.
3. Demand for housing in Honolulu’s core has never been met. Things that slow our market are lack of financing, high prices and fear (the first Iraq war & last year’s financial upheaval as examples).
4. If you are sitting on cash, after the cost of managing and maintaining a rental property you may receive a better return on investment that you could receive from putting your money in the bank.
If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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More great advice. Always always good to hear the positive.