Published by Entrepreneur Magazine | May 30, 2023
Rising real estate interest rates are not a reason to stress — they are an opportunity to invest.
The sudden spike in interest rates has undoubtedly created a challenging environment for those involved in real estate investment. Nevertheless, it is crucial not to succumb to worry as the market presents avenues for potential gains. Despite the rising borrowing costs, strategic and astute investors can adapt to these changes and uncover untapped prospects that align with their investment goals.
1. Keep your eye on the long-term prize
The rising interest rates may make it more difficult to purchase property in the short term, but remember the long game. Real estate is an investment that can appreciate over time, and the key is to make smart purchases that will hold their value.
Instead of buying a fixer-upper that may require expensive repairs, consider investing in a property already in good condition and with growth potential.
2. Consider alternative financing options
With the rise in interest rates, traditional mortgages seem less appealing to some. However, it is worthwhile to consider alternative financing options. One such option is hard money loans, short-term loans secured by the purchased property. While these loans usually have higher interest rates, they offer greater flexibility and are often easier to obtain.
Hard money loans can benefit those looking to make a quick purchase or who need help meeting traditional lending requirements. By using the property as collateral, the lender takes on less risk, making the loan easier to obtain. Additionally, hard money loans can allow for more flexibility in purchasing, making them a valuable tool for real estate investors looking to act quickly on a good opportunity. Though they come with a higher price tag, hard money loans can be an attractive financing option in certain situations.
