Summary: There’s a lot of noise about the effect of rising interest rates on the real estate market, so we’re here to clear the air and put our multifamily apartment investor friends at ease! Let’s learn what’s *really* going on with interest rates – and why multifamily apartment investments are still the best asset class for investors!
Rising interest rates have 🏢 multifamily apartment investors feeling a biiiit concerned…to say the least.
And we get it! Without knowing all the facts, it can be scary to hear rumblings about multifamily properties going down in value – because that would impact your returns AND your financial future.
But listen.
We’re here to restore your confidence in multifamily apartment investments!
We still believe that the multifamily space is where it’s at (if that’s what the kids are still saying?? 🤣) – even in the face of rising interest rates and real estate fear mongering.
Because there are lots of reasons why we LOVE ❤️ multifamily apartment investing — one of which is its stability during economic ups and downs.
So, while other real estate investing strategies miiiiight have some hard times ahead, we’re about to show you why multifamily is different.
Now, the truth of it is, that no one can truly know what the future holds. But we base our investment decisions on extensive real estate market knowledge, research, and experience – all of which is pointing towards multifamily property values either staying the same or rising.
Let’s shine a light on what’s really going on here, shall we?
We’ll walk you through the facts about current interest rates, and why investors are starting to get nervous. Then, we’ll share the 3 main reasons why you – as a rockstar multifamily apartment investor – can rest easy and feel GOOD about the future of your multifamily investments. 👌👌
Here’s what’s in store ⏬
- Straight facts – what’s going on with interest rates these days?
- 3 reasons why multifamily apartment investments will continue to thrive
- How to keep your investments safe in the face of rising interest rates
Straight facts – what’s going on with interest rates these days?
There’s plenty of talk out there about the happenings in the real estate market. We hear it all, and we understand why it can all be disconcerting for our fellow multifamily investors. But you know what we always recommend for settling the fear and uncertainty around market changes?
👉 Go straight to the facts.
Because, well, we all know how gossip gets around, people talk, and exaggerations make things muuuuch worse than they are. Well, we’re here to guard against such things – by bringing you exactly what you need to know about how interest rates might affect your multifamily apartment investments. 🙌
Here’s what’s up:
The Federal Reserve is responsible for a couple of important things in stabilizing our economy – battling inflation and supporting employment.
When you see those high-interest rates going even higher, these things are usually the reasons.
The goal of raising interest rates is to stimulate the economy by making loans more expensive for both borrowers and consumers. The immediate effect is that people spend more money on interest payments.
But here’s the thing.
Even if people want to avoid high-interest rates and save their money, they’re also helping the cause by putting less money into circulation – essentially cooling off the economy.
So, as you can see, raising interest rates is actually in the best INTEREST (see what we did there) of the economy.
It’s just not always easy to tell for real estate investors, who are watching as current interest rates of 5.00 – 5.25% might be going up again in the near future.
Don’t stress, friend. There’s good news to come.
While this mayyyy not be the best time to buy a house, it’s actually a very good time to rent!
Which means that multifamily investors are in the perfect asset class to benefit from interest rate spikes. 😏😏
3 reasons why multifamily apartment investments will continue to thrive
NO. 1 Renting is the new buying
You’ve probably noticed that more and more Americans are renting instead of buying – and staying for longer periods of time.
One of the biggest reasons happens to be interest rates, and how buying a home is a bit out of reach because of crazy expensive mortgage payments.
What does that mean for you?
Well, apartment buildings are an excellent investment in a time when people are becoming long-term, or even lifelong renters.
They’re out there searching for the right place to live – where they can feel at home and at peace, even if they can’t afford a mortgage payment.
As a multifamily apartment investor, you’re offering a solution to a very important need. 🤓🤓
Plus, you get to reap the financial benefits of investing in a solid asset class that will be in high demand for a long time.
NO. 2 More demand than supply
Speaking of being in demand… there’s actually more to it than that. Right now we’re seeing a pretty big imbalance between the supply and demand of apartment buildings.
In fact, The National Apartment Association says that the U.S. needs millions of apartments to be built by 2035 – 4.3M to be exact.
There’s just not enough affordable housing to meet the growing needs of renters in this country.
What we’re saying is that investing in apartment buildings is not just personally beneficial for investors, but can benefit the entire country by helping supply must-needed housing.
At the same time, the current supply and demand imbalance leads to more cash flow and less vacancies for current apartment buildings.
When housing demand is very high, property values are also high – meaning more money for multifamily apartment investors like you! 🤩🤩
NO. 3 Hedging against inflation
Remember when we said that interest rates get raised because of inflation, right?
Well, turns out that multifamily apartment investments are an excellent way to hedge against inflation, because of flexible and short-term leasing options.
See, apartment owners, have a lot of freedom to reset rent and adjust lease terms, which you don’t really see in other types of real estate ownership.
Flexibility allows apartment owners to adapt to changes in the market, which is key in our current “cooling off” economy.
There’s also more liquidity in multifamily apartment investments, making it easier to secure loans for apartment buildings than – say – commercial or office buildings.
Oh, and don’t even get us started on the incredible tax benefits in the multifamily sector (because we’ll talk about them allllll day) – which are just the cherries on top of a beautifully strong investment strategy. 😉😉
If you’re curious about multifamily investing tax benefits, check out how to Kiss Your Tax Stress Goodbye.
How to keep your investments safe in the face of rising interest rates
We’ve said it once, and we’ll say it again and again (aaaand again, and again, and again…probably forever), multifamily apartment investing is a solid real estate investment strategy.
Even now, when interest rates are on the rise and inflation is crazy high, multifamily investors are in the perfect spot to make LOTS of money.
Of course, knowledge is a powerful tool in making sure your investments continue to keep your cash flowing and your wealth growing, so you’re off to a great start. If you’re wanting to truly protect the future of your investments through whatever comes your way, though, there’s something else that can give you a major boost.
Having the right team to back you up. ✨
We seriously can’t even say this enough – putting your trust in the right syndication team is one of the best things you can do for your multifamily investments. Want to dip your toes in, and see how the water feels?
We’ve got the perfect thing.
If you want to connect with an outstanding investment community, stay up to date on all market research, and get access to incredible investment opportunities, join the Kitti Freedom Club!
Whether you’re a newbie multifamily investor, or a seasoned pro, we’ll get you set up for success in reaching your big financial dreams and goals. 🥰
GET ME ON THE KITTI FREEDOM CLUB
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