Published by Entrepreneur Magazine | March 24, 2023
Investing in real estate when interest rates are going up can be tricky. But if you know what you are doing, there is a world of opportunity.
When interest rates rise, finding profitable real estate deals can be hard. What might be a great deal when mortgage rates are low could lose you money when mortgage rates are going up. In times of high-interest rates, some people think the best idea is to wait it out and start investing when central banks pivot again.
But this approach means they miss out on some amazing deals and delay their investment goals. For those beginning their investment journey, it could mean never actually getting started.
The key is to know how to invest in real estate in a high-interest-rate environment. This allows you to make the most of the situation and become stronger on the other side. For those that know what they are doing, these times are great for finding awesome deals. If you know, these times can greatly increase your net worth. As a multimillionaire property investor and trainer, I have helped many of my students succeed in all market conditions. In this article, I will give you three tips for investing when interest rates are rising.
1. Use interest rates in your negotiations
When buying an investment property, you will be worried about whether the deal will be profitable when interest rates are on the rise. You will also be worried about where interest rates could be in the future.
This may seem like a bad position to be in. But do you know who else will be worrying about this? The seller. The seller will be aware that fewer people can buy their property. They will also be aware that interest rates could rise again if they fail to sell their property quickly.
Ensure interest rates are part of the conversation and your negotiating position. If you do this correctly, you could get an excellent deal with the right seller. This is particularly true if the property has been on the market for a while and the seller is motivated. If a seller waits too long when buyers are skittish, they may be waiting a very long time to sell the property. Use this market pressure to your advantage!
Getting a great deal is particularly important in these circumstances, as buying a property below market value will give you some leeway in volatile market conditions.
