Will The Fed Raise Interest Rates?

Performance Property Real Estate Question

Q: Gerald, I just got started investing in real estate. People say the Fed is going to raise interest rates. Is that going to happen and if it does should I be worried? Kendrick, Cuyahoga Falls, Ohio

A: Hi Kendrick, I’m always reluctant to make predictions because unlike a lot of pundits you see on TV, I can’t predict the future however all signs point to another interest rate increase and Janet Yellen has intimated that a rate increase is likely to happen. The bigger and more important issue for you as a new investor is to understand where you have the most leverage and to then focus on those areas. Interest rates are one of 7 things you cannot control in real estate, which are

7 Things you CANNOT control in Real Estate:

  • Interest rates
  • Taxes (Property and Income)
  • Cost of Insurance
  • Sale Price (when you sell) & rent price when you rent-because the person with the money ultimately decides the price
  • Price of building material
  • Price of land
  • Inflation

You should be aware of interest rates, taxes and other things that are out of your control, but being successful requires focusing your efforts and attention on the areas that you do control not fretting about things you don’t have any control over.

Thanks for your question, Kendrick. Good luck.

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