Interest Rates in 2022

Interest rates are rising – yikes!

Unfortunately, this is the sentiment, the fear, the outcry of news-driven real estate investors. They only invest when it’s “good” to do so.

Interest rates are rising – yes. Real estate investors adapt their focus to suit the present market conditions.

Glenn and Amber Schworm know what it is like to adapt to market conditions. Rising interest rates are not different. You need to know what to expect and what to do.

Glenn’s video, Interest Rates in 2022, provides helpful advice and strategy for serious-minded real estate investors.

While Glenn offers a plethora of helpful commentary, he focuses on two key areas. 

Mastering these areas in an inflationary economy is critical, significantly when the Federal Reserve raises rates to curb inflation.

Suggestions for Real Estate Investors During Rising Rate:

  • Secure Long-term Rental Property
  • Observe and Manage the Slowing Real Estate Market
  • Don’t Stop Investing
  • Let’s explore these topics and glean from Glenn’s wisdom, which supports numerous years of successful experience as a real estate investor.

    Secure Long-Term Rental Property

    Interest rates are rising, but they are not raising multiple points daily. Observe how the Federal Reserve is raising rates- incrementally.

    Notice how this gives you time to secure long-term rental properties. Why secure long-term rentals?

    You want to purchase long-term rental properties to maintain a steady income. You want a stream of income every month. The old saying is still valid, “steady money for steady bills.”

    Long-term rentals give you a stable income to support your monthly needs while working on long-term real estate flips.

    Securing these properties requires you to purchase them right – under market value. You do not want to pay retail for these properties.  

    As interest rates rise, your profit margin shrinks because of the cost of the debt you carry on these properties in combination with taxes and insurance.  

    So, secure a steady income and maximize your profit margin by purchasing undervalued long-term rentals.

    Observe and Manage the Slowing Real Estate Market

    A real estate market flooded with eager buyers is fun. All investors, both savvy and opportunistic, love this market.

    Yet, the savvy committed investor is unaffected emotionally and mentally by a changing market. 

    The opportunistic investor flees the real estate market when interest rates increase.  

    The savvy, committed investor grows patience and observes slowing trends.  

    For instance, in a slowing market due to interest rate hikes, buyers decrease in number because of affordability. As a result, inventory increases, and homeowners needing to sell their homes are far more amenable to lower prices. It’s important to understand that this is great for savvy investors.

    You might ask, “If inventory increases and buyers decrease, what do you do with your home?” The answer to this logical question is that you can achieve desired results by taking multiple approaches.

    Benefits of Purchasing at A Deep Discount

  • The home may be ideal for a long-term rental.
  • The home may be renovated and sold for a sizable profit. Remember, buyers have decreased, not disappeared.
  • You can wholesale the house to another real estate investor.
  • The real point is that there is money to be made. It’s just a different mode of operation.

    Don’t Stop Investing

    Whatever you do, do not stop investing – keep going.

    There is much to learn in a buyer-saturated market and just as much to learn in a slowing market.

    It would help if you focused on the needs of your community. Start by asking the following 6 questions:

    1. What’s going on in your real estate market?
    2. Are new businesses opening, causing people to relocate to your community?
    3. Are businesses closing and people desperate to get out of mortgages?
    4. Is the economy stagnant?
    5. What about property taxes are causing people to fall behind?
    6. Is your community an aging one?

    The natural beauty of real estate investing is that regardless of economic conditions, life continues.  

    The natural beauty of real estate investing is that regardless of economic conditions, life continues. People are born, they die, marry, and sometimes divorce. 

    People start businesses, and people relocate to work in new companies. Life goes on, and so should you. Do not stop investing.

    How Should You Approach Real Estate Investing with Rising Interest Rates

    Knowing what to do is essential. Knowing when to do it, even more so. Navigating changing market conditions is the mark of successful real estate investors.

    The navigation process can be learned by any entrepreneur that takes real estate investing seriously.

    Remember, people need housing. Most societies place the value of homes over food, so there will always be a demand.  As a result, you should not stop investing.

    Glenn and Amber Schworm are eager to see you join the upcoming Home Flipping Workshop. During this virtual class students are able to learn in the comfort and convenience of their homes. 

    Learn how to navigate all market conditions and prosper as a bona fide real estate investor.