Why Interest Rates Are Terrifying Investors Into Making Stupid Decisions – Episode 988

Today I’m going to share the #1 thing holding new investors back right now: interest rates. No one wants to utilize a high interest rate. Especially if you’re looking at things from a black & white perspective, I can see why a new investor might make a snap judgment and decide to push off their goals until rates are lower.

But if you waited to invest, you’d be overlooking some serious benefits of investing sooner rather than later. On this episode of Investing in Real Estate, we’re going to dig deeper into what’s going on with interest rates, what’s really behind the fear of higher rates, and more. Click play to learn more about why interest rates are terrifying investors into making bad decisions!

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If you’re waiting for interest rates to drop before you invest, you might be overlooking this important point: when mortgage rates drop, home prices will go up. It’s inevitable. So if you were to buy now, you could expect that when interest rates go down, you’ll have instant equity. On the other hand, you could pay more for a home next year, missing out on the potential to gain that equity.

Another thing to consider about waiting on lower interest rates is the impact rates have on the rental market. When interest rates are higher, we see more demand for rental properties, as fewer people are able to buy a home. We know there’s a housing crisis in the US, and while there’s nothing we can do to influence interest rates or lending practices, we can provide high quality, affordable, and safe rentals to those who need them.

Regardless of interest rate fluctuations, rental real estate can provide a sense of stability unlike any other investment type. Let’s compare real estate to stocks, for example. The security of real estate investing is unmatched. Stocks can plummet to zero overnight, but a tangible rental property can only increase in value over time. It doesn’t really matter what the interest rate is, because your asset is growing in value, building equity, and bringing in monthly cash flow – month after month, year after year.

Plus, during that time that you can always refinance if and when rates drop. I stand by the mantra, “date the rate, marry the property.” This means you’re committed to your investment, it’s strong, solid, and sustainable. The rate, though? Feel free to drop it if something else better comes along. When rates drop, you can always lock in a better deal. But you can’t go back in time and change the sale price of your property.

Smart investors know that buying when rates are normal or a bit higher is actually the smart approach. They avoid the feeding frenzy that takes place as soon as rates drop – and as a result, they have saved thousands on the property.

I want to remind you, investing in real estate is all about the long-term approach. The sooner you begin building up your portfolio, the sooner you’ll reach your Freedom Number. So as long as the numbers make sense and the market is solid, it’s smart to buy sooner than later. If your strategy is solid, it will be built on the pillars of minimizing taxes, protection from inflation, and building equity with multiple performing assets. Yes, interest rate matters… but it shouldn’t be the deciding factor when you’re considering buying assets.

If interest rates are holding you back from reaching your goals, I hope this video was encouraging. No matter where you are on your real estate investing journey, it’s always wise to consider your options and to take a look at fears and limiting beliefs that might be holding you back.

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