PLAN AHEAD
USE NEW LOAN PROGRAMS
Smart investors should be able to make profitable real estate investments even as interest rates rise. The truth is, rising rates can have a positive overall effect on real estate investing. With rising rates, there will be more demand for rentals because of buyers who no longer qualify for a loan. Even a small increase in rental demand can turn into a windfall profit for an investor in the right housing market. Also, rising rates tend to have a dampening effect on home prices. In this case, it can be a better time to buy if you’re sticking to a long-term mindset and have taken the necessary precautions as an investor. The bottom line: Investors need to remember that the ability to raise interest rates is proof of the core strength of our economy and investors can profit by planning ahead and by purchasing the right types of properties.
The 2% to 3% interest rates we saw over the last few years were a record low and spoiled us. But we need to view this as an emergency response to a global pandemic. By raising rates now, we’re fighting inflation by slowing the circulation of money. Rates will eventually come back down, and refinancing is a possibility. Ultimately, you will profit from the sky-high rental rates, so your return on investment should be the focus when analyzing a purchase. Look at investing in this current market as a long game, not a quick fix or an immediate cash-out. There are plenty of loan programs coming back under the protections that eliminate predatory lending practices. Adjustable-rate mortgages, the elimination of balloon payments, and non-prepayment penalties in newer loan programs make investing much more appealing. Do your research, partner with a solid lender that offers a variety of loan programs and continue to build your portfolio in a smart way.
YOU WILL PROFIT FROM THE SKY-HIGH RENTAL RATES, SO YOUR RETURN ON INVESTMENT SHOULD BE THE FOCUS WHEN ANALYZING A PURCHASE.
WITH RISING RATES, THERE WILL BE MORE DEMAND FOR RENTALS BECAUSE OF BUYERS WHO NO LONGER QUALIFY FOR A LOAN.
Donna Meeuwsen Topography Real Estate Tigard, OR Connect with Donna
Destiny Roxas Big Block Realty San Diego, CA Connect with Destiny
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