Magazine

How Will a Rise in Interest Rates Affect Real Estate Investors


paperfree Aditi Bansal

Updated on Tuesday, June 20, 2017

Brian Carpen, an Editor for the ‘The Banker,’ points out interesting facts in regards to the risks of avoiding increased interest rates. A decision made recently by the Fed has led a few folks to celebrate, but most people are still stunned by the move.

tags  #Real Estate Investors  #Real Estate Flippers #

 

Most people reading this know the long-term economic impacts of increased interest rates, but it’s important to understand that this is one of the greatest challenges for real estate investors. The answer to this question lies in the kind of property you’re focusing on.

One of the greatest challenges attributed to the low-interest rates is the fact that home flippers are now targeting first time home buyers. Carpen also thinks that low-interest rates are a permanent thing and any slight adjustments will result in increased interest rates. In Carpen's assertions, there is a greater expectation of reduced interest rates among the new generation homeowners. He also equates his assertions to a time when a mortgage of around 30 years came with an interest rate of as low as 9%. He also thinks that if such interest rates do go up, then it will be more difficult for the borrowers to adapt to the new changes.

He considers that the raising of the interest rates will come as a shock to some of the new generation of borrowers with politicians seeking to derail the whole process. Such a delay is meant to slow down the process for someone else to occupy the office and face up the uncertainties that the delay will have caused in the acquisition of the loans. If this was to happen the way we picture it to be, then it is closely related to how the current government entered the Whitehouse at the time of “managed depression.”

When it comes to real estate flippers targeting to hit the market for the first time, they will still face the challenge of increased interest rates, and this will lead to the loss of potential buyers. It’s yet to be seen how this will affect the interest rates on different real estate properties. Are you sure of this kind of effects? Kindly share your thoughts on the impacts of increased interest rates on those wishing to invest in real estate. Your opinions can be negative or positive, depending on the properties invested in.



This page with a focus on Real Estate Investors, Real Estate Flippers was shared by Aditi Bansal.

 
Share this on:

More links