For the purchase of a rental property (long term), with rates on the rise, I'm curious which of these options would you pick and why?

Btw, those in the #2 category are sometimes in the #1 category as well, as real estate tends to appreciate at around the same rate as inflation (historically), so if they don't have good reason to believe that their specific area is likely to see greater-than-average appreciation, they are basically just creating a cash-preservation strategy.

The rich are much more dependent on the rise of valuations of their investments.

In my oppinion it will not result in noticeably higher rates near term, but if or when inflation appears - watch out.

The loan is reviewed periodically and as the FMV rises, the principal is added back with a new payment.

The number of commercial foreclosures is expected to rise as well.

But at this point, just a stable market where it is easier to figure values and banks are lending looks very good to me.Of course, I also suspect we will get a lot of crazy inflation to go along with all the government spending of non-existant money.

Fyi, rates changed for the worse 3 times today by ½, 3/8, and 3/8.

Can you still get a 5% mortgage?

That said, even if he is getting a CoC return of 2% a year, that's money lost due to inflation (on average).

As the inflation starts to rise banks raise interest rates to curb inflation.