Posted by phil fernandez on January 11, 2003 at 16:10:13:
As far as what interest rates are going to do in the near future, who knows. We all have our theories. I would tend to agree with Ray Alcorn on interest rates rising. One he has seen and been in many real estate cycles so he would have a feel for this. I just don’t see rates staying where they are now. They have been too low for too long. But again that’s just my opinion.
To answer your question. With rates as low as they are now, you win either way. By buying real estate as a long term investment now, you are locking into low low interest rates. Which in turn helps your cashflow when paying less for mortgage money.
You also win by flipping property now because with the low rates more people can qualify for mortgages and this tilts the law of supply and demand in your favor.
So the good times are here now with low rates and the good times will be here for us investors when rates increase. You might have to change your strategies abit, but it’s always a good time to make money.
Low interest rate environment… - Posted by mike hoeft
Posted by mike hoeft on January 11, 2003 at 14:48:02:
I just finished reading Ray Alcorn’s article in the advice articles section of this site.
Although I agree with many of his central tenets, I must say I disagree with Mr. Alcorn’s belief that interest rates are rising. I think our economy is still sluggish at best (with our economy still being the strongest around the world) and with our dollar getting hammered because of war tensions and the such, I do believe Mr. Greenspan will be on hold for a very long time.
But that is only my opinion. Mr. Alcorn may very well be correct himself. Guess we will just have to wait and see.
Still, how would one take advantage of buying homes in a low-interest rate environment? I mean, I know it is financially smart for a current home-owner because money will be cheaper to borrow.
However, is it easier for an investor either to flip properties or invest in long-term properties now because of our low-rate environment?
If so, how would an investor make this ease in borrowing mutually beneficial to both parties in the transaction (say, on a lease-purchase deal)?
I know it would be easier to borrow money in general, but am I missing anything else that you pros may know about?