How should you plan for interest rate increases when investing?

[James Masotti]

I'm curious to get the perspective of more seasoned investors who have been around during interest rate increases and decreases before. With the prime rate having been increased in December for the second time in only 8 years. How do you plan for these things in your real estate business? Whether your are a flipper or a BRRRR investor higher interest rates will in a stable market (not including places like Seattle and Denver in this conversation) lead to declining sale/appraisal prices and allow you to cash out at a lower % to ARV in order to meet your cashflow needs. With the health of the economy as strong as it is now my guess is that we'll start to see rates working their way back up towards the 5-6% mark...I just don't know how quickly it will start to get there to take this into consideration when evaluating deals.