I think the hardest thing to overcome is the old school mindset that treats the physical structure as the financial asset in and of itself. From my observation, this is what causes what I consider bad landlord behavior when they take as much cash out of the property every month, rather than plan to reinvest. Getting them to switch their mindset to one where the goal is to “produce and sell space while achieving long-term price stability” relies on having something like bitcoin that operates as a treasury that always increases in purchasing power in any 5-year timeframe.
“How did #realestate investors cope with the rising CapEx caused by currency devaluation in the 1970s?“
From research and conversations with RE developers who were active in the 1970s and 1980s, I learned that to cope with rising maintenance costs, inflation, and interest rates, landlords simply raised rents and passed the costs onto tenants.
According to a business partner, this is the reason why there are rent caps in Germany, Sweden etc.
In my opinion this illustrates how the fiat system, with its inherent inflation, forces rational market participants to do things (in this case, increase rents) that have negative social consequences.
This is further evidence of the negative impact that central banks, currency devaluation and inflation can have on individuals, society, and the market.
Bitcoin as a disinflationary money and deflationary currency system obviously offers a better alternative here.
1. Property owners can use bitcoin to protect their cash flow from inflation and are not forced to pass on the higher costs to tenants.
2. This means that, in theory, property rental costs and valuations are not rising as quickly.
3. In the best case scenario, this will make housing affordable and building attractive again in the long term.
https://bitcoinmagazine.com/culture/how-bitcoin-will-make-housing-affordable
Discussion
Absolutely. Bitcoin really holds the potential to change housing for the better.
Commercial property, too. I recently had an owner for whom I manage a 30,000sf single tenant office building express interest in converting some of their reserve funds to BTC. The building is going to need significant capex over the next several years and hoping that we will be able to continue increasing rents to keep the value inflated isn’t a wise strategy.