Rising interest rates - impact on rentals market

[Justin C.]

Getting back on the forum after a while & looking at purchasing a rental this year.  

Interest rates have gone up quickly so far in 2021 and it seems this could continue, driving up mortgage rates. I am wondering what impact people expect this to have on the rental market (particularly SFH/Condo/2 family).

My first thought was, lock in low borrowing rate & inflation hedge by owning rental real estate -- double win. However there might be an argument that as rates go up, people's ability to afford a home goes down, which could well reduce selling prices & increase cap rates. After all it seems the market has been very hot recently due to low rates & covid.

For someone who thinks mortgage rates are going up, and is looking to buy a rental -- would you act quickly to lock in a low rate, or wait to see if increasing rates / slowdown of covid cause the market to cool off and give a better overall entry point?