Rising Interest Rates!

2 Replies

After the Fed announcing today that they have raised the interest rate by a quarter point today and saying they will keep raising rates with the next proposed hike coming in December and three more next year borrowing money will continue to get more expensive.

With an already tight market in almost all areas this will make deals harder to come by. I haven't been investing for long but rates have gone from low 3%'s to now close to low 5%'s.

Will this rising interest rate environment change anything in your business and what will you do to adapt? Do you think that prices will drop because of this?

Yes, I think prices will drop a bit. However, in the big picture, 5-6 percent is still very cheap money. 

Minneapolis is a tough market. I shopped there for months for a duplex to live in before switching to a SFR where I rented out rooms. That was before the bust in 2008. I don't want to look at Zillow to see what my former home is valued at today.

I do think that prices will drop as the Fed rate increases.  I'm hoping the rate increases will weed out some of the competition (price as a barrier to entry).