It’s a notion that most everyone can agree upon. The fact that everything, taken into context, is relative based upon the perspective of the observer. Real estate investors are well aware of that and it’s not difficult to figure out why. For example, a novice real estate investor buying and renting out amortgage rates going up for investors duplex that sold for $75,000 is a large amount.

So much so that the investor likely took out a loan in order to purchase it. Another investor would consider that a very small investment if the investor is used to constructing new apartment buildings. Both are real estate investments for sure but they appear differently to different people based upon experiences of the past.

When you hear bankers or economists talk about interest rates, you might get the impression that the sky is falling. Institutional investors pay analysts lots of money to follow every economic report, attend important meetings and watch out for the next rate increase. When rates go up or down, either way it’s big news. But that’s the industry they’re in. Their business relies on predicting rates and taking advantage of the current cost of funds.

When the Fed eventually winds down the current quantitative easing program later this year, predictions are that the Fed will begin to raise rates at some point in the future. Some think next spring while others aren’t so sure. But when, not if the Fed does raise rates, the sky won’t fall. The bump will likely be 0.25 percent. All rate increases of any measure will keep some from buying a home but the answer to that is to buy something a little smaller, a little less expensive. A 0.25 percent jump from the current 0.25 Fed funds rate is doubling the rate but in all fairness the rate will still be below 1.00 percent. That’s not going to shut down the economy. When the Fed makes a move, no doubt the stock markets will take a hit as well securities, but once the dust settles and everyone finds out that the earth didn’t open up and stars stayed in the sky, any hysteria will quietly calm down.