It’s very possible that you’ll be hearing reports and reading articles about the impending high rate environment. Primarily because the Fed recently announced a revised policy that stated they could begin raising rates at their own judgment without regard to any current unemployment rate. For thehigher rates past several months it has been stated policy that raising interest rates could start once the unemployment number reaches 6.5 percent.

The most recent unemployment number showed 6.7 percent unemployed for the month of February.

This announcement surprised many as it was in fact a change in policy albeit a seemingly minor one. 6.5 percent isn’t all that far away but the rate did tick up 0.1 percent from January, keeping any rate increases at bay. Now the 6.5 target is more of a guideline rather than any condition and the Fed flatly stated it could raise rates regardless of any previous milestone. So how should you, the real estate investor digest such news?

There are two things to consider. First, when rates go up from an investor’s perspective it’s not that much of a concern when the rate moves between ¼ and ½ percent or so. The monthly payment change isn’t all that dramatic and Fed tightening will typically move in ¼ percent increments. The second thing is to make sure those who buy your newly built investment property also know that musings of higher rates should have little effect on their borrowing capability. Sure, the mortgage payment will go up as rates increase but the moves are typically slight ones.

And finally, if the Fed does begin raising rates it’s because the prospects of a stronger economy are increasingly higher. With more people at work and as wages rise then the pool of buyers widens rather than getting smaller. At the outset there may be a slight bump but the longer picture looks better if more people get back to work, buy houses and make and finance goods and services.