Buying and Selling Real Estate when Interest Rates are High!
As we face a prolonged period of inflation and high borrowing rates, many of our clients ask us about investing in real estate in such uncertain circumstances. One strategy would be to invest in properties that generate cash flow, such as residential rental properties or tenanted commercial buildings. You could also consider investing in real estate projects that have the potential for appreciation and capital gains, such as fixer-upper properties or new developments. In both cases, it's important to conduct thorough research and due diligence to ensure that you're making a sound investment and are able to meet your mortgage obligations.
Additionally, you can explore alternative lending options such as hard money loans, private money loans, and crowdfunding platforms. These options often have higher interest rates than traditional bank loans but can provide easier access to capital for real estate investing.
Buyers need to be extra cautious when calculating monthly expenses and should include mortgage payments, realty taxes, insurance premiums, management fees, and costs of repair or maintenance.
It should be noted that the interest rate on a mortgage is just one factor to consider when buying a house. Other important considerations include the overall housing market, property taxes, and the local economy. It's always best to consult with a financial advisor or real estate professional to help you make an informed decision.