RealtyTrac economist Peter Miller reasons his way through economic scenario after scenario, proposing financial outcomes based on various investment tacks in light of monetary policy, taxation, inflation rates, etc., and the risks and rewards of those tacks..
From an investment strategist's standpoint, the picture ahead is not pretty. Miller's logic leads to the following conclusion:
We could be in for a decades-long period of financial inertia, a time when interest rates are stuck around zero and maybe below. It’s the financial equivalent of giving a party and nobody comes only in this case we have huge amounts of capital at low rates that no one wants to borrow.In such an environment owning real estate at least presents the opportunity to convert debt to equity through amortization, tax benefits and the possibility of appreciation. That may not seem like a great return when compared with past decades, but hanging on in the new era is likely to be a far-better strategy than renting and no equity at all.