MARKET & TRENDS
MULTIFAMILY
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5 Trends Shaping Multifamily Investing Today THESE TRENDS POINT TO MULTIFAMILY AS A PRUDENT INVESTMENT—IN THE RIGHT MARKETS.
by Grant Cardone
nless you’ve been living under a rock, you know
can increase your payments needed to service the debts. And they can affect your cash flow. All of which, of course, affect your net operating income and, ultimately, your exit price. That’s the bad side of rising rates. The good side is that it will force some bad operators to liquidate, and you may be able to pick up some deals.
U
TREND #1: RISING FED FUNDS RATE
that real estate in 2022 and beyond looks very different from what it has during the past 10 years. Which begs the question: Is multifamily still a great investment? To help you answer that question, here are some trends you’ll want to keep a close eye on.
In the grand scheme of things, the federal funds rate is still incredibly low; therefore, lending rates are too. But, as the accompanying graph shows, they are on the rise. Rising rates can affect the size of the loan you might qualify for. They
Federal Funds Effective Rate
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
JUL 2020
SEPT 2020
NOV 2020
JAN 2021
MAR 2021
MAY 2021
JUL 2021
SEPT 2021
JUL 2020
NOV 2022
MAR 2022
MAY 2022
1960
1970
1980
1990
2000
2010
2020
https://fred.stlouisfed.org/series/FEDFUNDS
Shaded areas indicate U.S. recessions
Source: Board of Governors of the Federal Reserve System (US)
60 | think realty magazine :: september - october 2022
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