Commentary If you’ve been a real estate investor during the past decade, you likely reaped the benefits of price appreciation. Even if you had only a minimal understanding of how to invest in real estate, you could still watch your home value consistently increase while raising your tenants’ rents every year. In the past two years, that trend has gone into overdrive. Home prices have shot up faster than ever, and we’ve witnessed record-breaking rent growth in almost every major market across the country, especially the areas that had a sudden influx of new residents.
Now, post-pandemic, things are changing. The housing market has cooled off, and the era of rock-bottom interest rates has come to a close. The cost of borrowing has gone up—owing to rising inflation and the consequent rise of interest rates by the Federal Reserve—which has depressed demand. Meanwhile, there are some economic indicators that a recession is imminent. High inflation, high interest rates, and a bear market are all here. For rental property owners, this can spark concerns that they’ll have to lower their rents or that they’ll experience long-term vacancies….