Rising Fed Rates: How will it Affect Real Estate Investors?
Last December and March, the Federal Reserve introduced rate hikes, leading to speculation on how bond yields could be affected.
Investors, according to U.S. News, we're sure to see additional rate hikes in 2017 and 2018. Don't fret, but be aware of the possible outcomes of this happening in relation to your portfolio.
When interest rates are rising in parallel to an improving economy, occupancy rates tend to be high. This "bodes well for certain sub-segments within the Real Estate Investment Trust (REIT) space."
REITs and apartment investors might see a total return due to "moderating fundamentals to a sustainable level of growth, after seven years of substantial growth since the Great Recession ended – not because of rising interest rates," reports U.S. News.
In the short term, industrial property investments are expected to perform better than other types of properties and alternative investments. U.S. News warns that mortgage REITs historically invested in securities "are more sensitive" and feel the impact from rate increases more so than equity REITs.
Learn more about how rising interest rates could affect your portfolio now by reading the entire U.S. News article here: https://ow.ly/TO8V30b7GSK
How do you feel about the rising Federal Reserve rates? Let us know, leave a comment below.