A client of ours had been thinking of investing in real estate, as thousands of others currently are, yet hadn't yet bought that first property. Why? According to him, there are three valid reasons.
First, he was waiting to get another financial situation resolved, specifically he was arguing with his bank about the status of a property he co-owned with his daughter. His daughter lived in the property now but had previously owned it as a rental. The client had bought the property with his daughter to help her get started in real estate investing but had since moved into the property when their old tenant left. The problem?
The lender wanted to identify the property as an investment property even though the daughter was living in it. The interest rate on the mortgage note was 6.00 percent and a 15 year fixed rate was 3.25 percent for an investment property, but 3.00 percent for an owner-occupied home.
The back-and-forth had been going on for a couple of months yet the owner was holding his ground.
While holding ground is a prudent action, what if rates suddenly went back up to say, 4.00 percent? Or 5.00 percent? Can someone say six? It wasn't just a few years back that 6.00 percent was the going rate, is it impossible for rates คอนโด กรุงเทพ to float back up to that range? Of course not.
Yet our client wasn't going to budge.
The problem with inaction is that it hinders opportunity. Interest rates, along with loan principal, are the key ingredient when determining cash flow on an investment unit. If rates rise too high, suddenly all the "great bargains" out there simply become stale listings.
It's important to analyze each financial transaction and to regularly review a portfolio. But thinking too hard, or "over-analyzing" a potential deal is enough to kill a deal before it ever gets out of the gate.
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