As interest rates continue to stay relatively low as property as values gradually rise it’s an excellent time to buy and finance a rental. The lower the rate the greater the cash flow. Locking in today’s rates while rental rates increase over the next 10 years is golden.

interest rates i perspectiveReal estate investors who have been active in the market for the past 10 to 20 years can look back and see the types of interest rates paid over time compared to what’s available today.

For those new in the market, it might seem as if 30 year fixed rates in the 3.00 percent range is the historical norm but it’s anything but. On the opposite side of the scale, in October of 1981, the 30 year rate hit 18.53%, this according to data from the St. Louis Federal Reserve Bank. Not many financed properties with that rate, most took adjustable rate loans, but even those who did take a 30 year rate they soon refinanced.

A few years later, in March of 1987, the 30 year rate broke the double-digit floor and came in at 9.03% then moved back above that mark for the next few years. January of 1991 saw the double digit rate broken yet again, never looking back. This period witnessed a string of falling interest rates. In October 1993, the 30 year rate dropped to 6.74% and mortgage lenders across the country enjoyed an extended period of refinance activity.

Rates rose and fell and as of May, 2000, the the 30-year hit a peak at 8.52%. Since then, mortgage rates have drifted lower and lower, hitting a historic low in January of 2013 and staying below 7.00% since mid-2006.

So, are investors spoiled? Maybe, but not the ones who have been around the real estate investment block a few times. You can never accurately predict what rates will do but you can decide what to do in the current environment. And the environment is very, very good.