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The specter of inflation strikes chills into the hearths of many consumers \u2013 even more than its cousin, deflation. But not all inflation is created equal \u2013 and for both the economy at large and for income property investors, some inflation can be a very good thing indeed.

Consumers fear inflation because to them it means higher prices for the goods they buy every day. In oth4er words, the dollar doesn\u2019t go as far as it once did. And most people don\u2019t give much thought to inflation\u2019s opposite number, deflation, which economists and financial experts consider far worse.

Inflation is measured a number of different ways. The Consumer Price Index tracks how much it costs in a given period to buy a specific amount of tangible goods. Those figures are expressed in two different kinds of inflation \u2013 headline and core.

Headline inflation is the kind most of us worry about \u2013 the rate of inflation in prices for all kinds of goods, both those with relatively fixed prices such as clothing and \u201cvolatile\u201d goods like energy and food, whose prices can change considerably due to a variety of shifting factors.

Core inflation, on the other hand, measures the costs of stable goods only. It doesn\u2019t take into account the prices of those volatile goods, and some economists consider it a more accurate representation of actual inflation. Others argue that since core inflation numbers exclude food and fuel, those stats give a skewed impression of that actual inflation that hits American consumers and drives monetary policy.

There are other models for tracking inflation, too, and some financial experts are calling for more investment into using them. But these models only chart how much inflation is affecting consumer buying power and business prosperity. They don\u2019t reveal the effects of inflation on individuals and the economy \u2013 or what to do about it.

Inflation has a variety of causes. According to a recent\xa0Business Insider\xa0article on the history of inflation for over a century, the US economy underwent cycles of severe inflation after the two World Wars, and has gone through a number of milder cycles of inflation and deflation since then. Severe deflation led to the Great Depression of the thirties and is associated with other tough economic times over the years.

That\u2019s why the Federal Reserve has decided that a little inflation is better for the economy than none at all. And though it may seem like callous disregard for the every day consumer, the Fed aims to keep the economy in a slight state of inflation \u2013 ideally, around two percent a year.

That rate, as the Fed sees it, is just enough to keep prices and wages relatively high and prevent a slide into deflation and ultimately recession as prices fall and so do wages in the dreaded deflationary spiral.\xa0 To do this, the Fed sets federal fund rates, the rates for bank-to-bank lending. While that doesn\u2019t impact consumers directly, its effects trickle down in the form of rates for long-term loans \u2013 such as mortgages.

If some inflation benefits the economy as whole, it can also be a boon for investors in income property, since real estate can be a hedge against inflation. Rising prices can increase the real value of property over time, and that means higher resale values.

A positive inflation model assumes higher wages along with higher prices, so investors in rental real estate can charge higher rents. But the most significant benefit of inflation for investors is the lower \u201ccost\u201d of a mortgage.

If you purchase an investment property with a long term fixed rate mortgage, as Jason Hartman recommends, your mortgage payment will stay the same, but it takes less of a bite over time. Higher prices and higher rents make it easier for those rents to cover mortgage payments, and the real value of the debt goes down. That\u2019s another reason to leverage the power of a mortgage for building wealth in rental real estate.

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However it\u2019s measured, inflation is a part of the financial landscape. But for income property investors and the economy as a whole, a little inflation may not be a dangerous thing.