As we know, an interest rate is the rate at which interest is paid by borrowers for the use of money that they borrow from a lender. The higher the interest rate, the higher the debt service and the lower the cash flow before taxes on investment real estate in Boise.
If cash flow is to be maintained on an investment property in Boise Idaho, the price needs to decrease. Unless the buyer is willing to live with a lower cash flow. As interest rates go up, so will interest rates paid by banks on deposits. Therefore the differential in returns on real estate investments and just leaving your money in the bank will decrease.
So what does this all mean? If interest rates go up and buyer still demand the same or higher returns on the their cash investments, then prices will need to decrease. However, if buyers remain in a mad scramble to put their money into real estate investments in Boise Idaho and elsewhere, then they will need to live with lower returns.
The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.
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Regards, Michael Hon, REALTOR®CEO, The Iron Eagle Realty Team
Associate Broker, Silvercreek Realty Group
Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax: 208.514.1422