Unrest in the World
Now, unless you’ve been living underneath the rock you can see that there’s a lot of turmoil going on in the world today. Especially with the warm root Ukraine and inflation happening in the United States of America. Welcome fear not. The office advisor has your back for all your commercial real estate needs. It’s important to understand that in every market money can be made. Especially when there is downturns as well as Recessions. Having a team that’s around you I’m gonna understand and navigate you through this market is imperative to your success. Visit our website today to learn more at www.theofficeadvisors.com.
In uncertain times it is smart to have a team of individuals around you that can prepare you and advise you in situations. The office advisers are just the right company for you in your commercial real estate needs. Do not work with just your average commercial real estate broker in Atlanta. The office advisers there have the right broker for you. No matter if you were investing or trying to release some space. Is important to understand what is happening globally as well in your own tidy market. We have the team before your needs.
The Unknow of what is happening
Yesterday Monday the 28th of March 2022 started off with some uncertainty in the world. Especially when there we’re rate hikes announced in the United States by the federal reserve. What this means is there’s more expensive to borrow money. Unlike the past and what has been happening currently In the recent past. The rates were hiked a massive amount in one day. They went up an entire point on conventional loans. Furthermore, these mortgage companies were instructed not we’re instructed to not lock in their rates till 15 days from closing. Meaning if you purchase a house or even a commercial property the entire deal could change 15 days out. That is on your financing side. Meaning that the numbers of how the property was purchased are now not avoided due to the interest rate increased
Characteristically this was done once the Treasury bond 10-year yield curve was inverted. What this means is that now it is more expensive or you’re actually losing money when investing in 10-year government bonds. When this happens which is typically a safe bed it is a clear sign of a recession. This has been one of the key indicators that economics has focused on since the great depression as an indicator of a recession
Have no fear
Do not fear because a recession is near. As an investor, they should Excite you. Inflation and price increases on property over the past few years have basically run rampant in the market. Now we will see a cooling-off. Prices will start to decrease as purchasing power decreases along with it. When things go intangible like this it is generally panic in the mass population. However, if you work with a good commercial real estate broker Lana they will guide you through this process and show you that is actually a great thing for investors. It “that I have always lived by is by when there’s blood in the streets.
Do not panic most of the public
What this implies is whether it be war or pure panic amongst the general population. There are deals to be done in millions to be made. Better deals will happen when people have to sell their property. In order to get out from underneath something, they will have to sell it even if they’re upside down. That is when you purchase the project or property at a discounted rate. Knowing that there will be an upswing back in the market. Making sure that you don’t time it too early is also important. However, there are always deals to be made as well as opportunities in every single type of market.
Consequently having a commercial real estate broker in Atlanta that can guide you through this process is imperative to your success. Especially if you were a novice. Now, the office adviser can be just that brokerage for you. Do not hesitate and reach out to one of us today. Even if you were trying to dispose of 1 of your properties or add to your portfolio. The team of commercial real estate brokers in Atlanta and our office are the best among the best. We work harder faster and smarter than all of our competition. If you don’t believe us we suggest you even check out our Google reviews. All of them are from customers and clients like you.
What does this all mean financially?
If you’ve made it this far in the article you probably understand most of the economic factors that are affecting the global markets. However, even if you don’t that is OK. If you are one of the many who do not understand what an interest rate increase typically means do not fear. We have experienced commercial real estate brokers and Atlanta who can guide you through this period I will give you a quickExplanation of what an interest rate hike entails for a better superior I just appear in the long-short of it is this when an interest rate goes up that means what you borrow against the principal. Is now more expensive to pay back. So interest is something that you pay on top of it.
Think of it like this period if you borrow $100 at 20% that means you’re actually paying $120 back. So when you purchase a home for $400000 there is 4% interest initially You’re going to pay 4% over the lifetime of that loan. Once an increase happens like yesterday that can change the entire outcome of the deal. Especially when it comes to purchasing investment properties. When interest rates are increased it exchanges the amount of cash flow property can produce.
Here is an example
Think about it like that period you bought a building say it’s a multi-family complex. Means they’re 10 renters paying rent to live there. Therefore, at a 4% interest rate on your loan and in this competitive market money was cheap tomorrow. However, since it was a very very interesting property there were many bids in the price gun inflated. Multi-family has been one of the strongest product types in commercial real estate to succeed throughout the past few years and pandemic. This means your returns were compressed based on the fact that prices were increased. Each percentage point means you lose less cash flow on a property. Whether that be on the buying side or the linting side. Now that interest rates went up one more percent means that you could lose tens of thousands of dollars right off the ribbon cash flow.
Moreover, if a property is now losing tens of thousands of dollars in cash flow from the beginning then it will not recover the loan. Now it is no longer a good investment it is a burdensome property. If you cannot make the payments on the loan because the property is not cash flowing enough. Then it is probably a good time to get rid of it. So when trying to purchase an asset it is important to have a good commercial real estate broker in Atlanta on your side. Understanding the numbers is what makes a good investment.
We try to make it as simple as possible for you to reach us. That is why our website is easy to use and navigate. No matter what you are trying to accomplish the office advisors are here. We have the right commercial real estate broker and Atlanta standing by for you. All you have to do is reach out to us. Begin your commercial real estate journey today.
Paying attention to what is happening in the market is important. Especially when you just read this article can see how can affect many different investment aspects. As well as purchasing power. Therefore we think it is a good idea to stay on top of what is happening globally as well as financially. Takes time and read this article.
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The office advisor smalls under a brand of real estate companies. We are able to assist you in all your different markets and needs. Whether it be purchasing a commercial real estate asset or your 1st time period we have the right organization for you. As well as the right commercial real estate broker and Atlanta to assess.