As interest rates rise, the rental investor still wins
Sunday 20th February 2022
People forget - rental yields track interest rates.
A tenant always has a choice to buy but firstly has to come up with a deposit and then to pay interest on a mortgage.
If interest rates on mortgages rise, not only does a landlord need more rent to cover their own interest costs but the tenant finds the cost of a mortgage increasingly prohibitive, so is obliged to carry on renting.
The net effect is, over time and with a slight lag, rents are always higher than interest rates.
As a landlord, whilst rates go up, you can be confident that your rent will keep pace.
Share this article
k L E D