The Impact of Economic Factors on Real Estate Investments
Real estate investments depend heavily on natural and easily changeable factors that greatly affect profits and risks. Evaluating these economic forces to manage risks within the investing framework and be proficient at operating in the stock market environment is fundamental. Let's get better insights from Don Mclain on the impact of economic factors on real estate. The Impact of Economic Factors on Real Estate Investments 1. Interest Rates In real estate investment, interest rates are always considered a force. A lower interest rate reduces borrowing costs, so investors can easily acquire property financing. This filters down to affordability and, therefore, demand and increases the property value in the area. On the other hand, high interest rates equal a higher cost of finance, which can dampen the market and decrease property prices. 2. Inflation Inflation has many impacts on real estate. As inflation embedded itself in the economy, property prices are commonly seen to go u...