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As an Investor,
if Interest Rates increase,
you don't pay for the total increase.
When
you're paying off your home and the interest rates increase, who
is responsible for the increase? You are...but as an investor you
are not, why?.... because we can claim the increase against out
taxable income.
Lets
say, for example - you are on a $60,000 income and your tax
bracket is 42%. If the Interest rates have increased by 1%, you
will be claiming the 42% against your tax right, so in reality,
the interest rate has only gone up for you 0.58%.
Plus, if you're concerned about interest rates increasing, talk to
your lender and ask about having the Interest rate fixed for 3-5
years, then you know what your repayments will be for that term.
Not only that, another
positive aspect you will discover is-
Rentals will also
increase.
Because
we have new home buyers always coming into the market, when
interest rates increase this puts a hold on their decision to
purchase a home and instead they choose to rent, which means we
get an increase in rental demand, which means.....
Rents Increase.
So when you think about it we are just playing the property
cycle game, we must have these increases happen so the property
cycle can stick to its cycle. But it's up to us (property
investors) to protect ourselves with safe measures just in-case
something like this does arise.
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