All Topics / The Treasure Chest / What if bank rates go up?

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  • Profile photo of yestooyestoo
    Member
    @yestoo
    Join Date: 2003
    Post Count: 0
    September 25, 2003 - 5:57 am

    you buy a property under the buy and hold rule. If bank rates go up do you raise the rent?

    Profile photo of BettyBlockbusterBettyBlockbuster
    Participant
    @bettyblockbuster
    Join Date: 2003
    Post Count: 46
    September 26, 2003 - 5:41 am

    That depends if the market will tolerate it or not. If your concerned about rate increae why not put a portion or all of your mortgage on a fixed interest rate.
    BB

    Profile photo of MilkmanMilkman
    Member
    @milkman
    Join Date: 2003
    Post Count: 22
    September 26, 2003 - 5:53 am

    Yestoo,

    As Betty says it all depends on what the market will bear. The tenant is extremely important to you as they are your income. If you raise the rent and they leave, your exposure is greater.

    You would probably try to hold the rent as long as possible, if it becomes unbearable either sell…..or do some minor improvements to the house in order to better justify an increase. Always create a WIN/WIN situation, your tenant wins by enjoying the new improvements and you win by covering your interest rate increase.

    You will have to do the numbers but this can be a viable option.

    Good Luck.

    Milkman

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