Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
11y
I think thats a question that requires more info to answer.
The answer depends almost entirely on why interest rates would be going up.
Are rates going up because the economy is booming? If so, then inflation is going up. If inflation is going up then the price of homes are going up too.
So that would be my answer with the added assumption as to why interest rates are going up. If you can foresee some other reason why rates are going up and the economy is not booming, then I might want to reconsider depending on the reasons why rates were going up.
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
11y
I look at that as increasing my properties value since I am a buy and hold investor and it will mean it is harder for prospective tenants to buy a property themselves so there will be more demand for rentals.
Havertown, PA · Member since 2014 · 21 posts · 1 vote
11y
I would assume it's heavily affected by location. If your home is in an affordable area populated with first time buyers and lower income people than obviously interest rates increasing will make current prices less affordable and you'll have to adjust accordingly in order to sell. .
Real Estate Investor · Los Angeles, CA · Member since 2014 · 15 posts · 0 votes
11y
They'll go down as defined by NOI / r - g, where r represents the required rate of return. This will go up as competing investments will increase in yield. I wouldn't be too turned off by changes in rates - the forward curve is benign, the change in value is only on a mark-to-model basis.
I'm a buy and hold. Low income area. So if interest rates rise that would be great for me. Although it'd be tougher to sell any 2 family at a good price more people would be forced to rent.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
11y
I think thats a question that requires more info to answer.
The answer depends almost entirely on why interest rates would be going up.
Are rates going up because the economy is booming? If so, then inflation is going up. If inflation is going up then the price of homes are going up too.
So that would be my answer with the added assumption as to why interest rates are going up. If you can foresee some other reason why rates are going up and the economy is not booming, then I might want to reconsider depending on the reasons why rates were going up.