Should I Be Worried About Interest Rates?

[Victor Nguyen]

I’m a first time real estate investor that is about to sign off on a duplex for lease. As we all know, interest rates have been very high these past years (7.5%-7.7%), and there are rumors that the FED are looking to cut the interest rates in 2024. Should I wait for the interest rates to drop before I buy my first real estate property? Or should I buy it now, because I know a lot of real estate investors always saying that their biggest regret was not starting sooner. 

[Shervin Golgiri]

You can't trade Time with interest rate. If the deal is right, go ahead. If interest rate goes down, price will go up, more demand.

[Matthew Paul]

Rates are going to do one of three things . They are going to go up , they are going to go down or they will stay the same .   If you buy now and they go up you will be happy with your rate , if they go down , you refinance , if they stay the same nothing changes . 

But  odds are house   prices wont go down .  There is little inventory   If you have a deal that works with todays rates  go for it .   Deals are hard to find in todays market .

[Michael McKinney]

@Victor Nguyen If the deal pencils today with current interest rates, why would you not? If you feel that interest rates are likely to drop, property values are not likely to follow suit. In this event you will be able to purchase the property for less money now and refinance at a lower rate when interest rates drop, making your deal that much better!

[Stephen Seals]

It's all about context.  If you look at the 3% interest rate on this graph, you'll see that it's a once in a lifetime dip.  Money isn't supposed to be that cheap.  What we're seeing now are fairly "normal" interest rates from a historical perspective.  Granted, they may come down slightly, but I wouldn't expect a dramatic decrease anytime soon.  The way I look at it, it's a great time to hustle and find deals while others have pressed the pause button.  You can always refi in the future.  If it cash flows solid after detailed UW and it feels good, go for it.

[Preston Dean]

@Victor Nguyen The best quote I heard was 

"Buy real estate & wait. Don't wait to buy real estate"

Don't believe in the hype or speculation about what the feds might do. I was told my by loan offer over a year ago that the rates in spring of 2024 would be back in the low 6's high 5's... look where we are. 

[Russell Brazil]

If rates drop, you can always refinance later. If rates go up, then the current rate will look good.