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How rising interest rates are bringing big opportunity for real estate investors in Midland

Jenna Lorette, broker and owner of The Mortgage Centre in Midland, offers advice on making the most of this cooling market

During the pandemic, the real estate industry found itself in a unique situation.

Financial uncertainty and job loss prompted many property owners to sell, while the remote work model brought others the opportunity to relocate away from the city to smaller urban centres and more remote areas. Increased demand and lower borrowing rates caused listing prices to soar and stories of properties selling for hundreds of thousands over asking became the norm.

Fast-forward to the present day market. Interest rates continue to climb and the market has cooled. Property values are falling and many potential buyers are wondering if it’s better to wait it out.

Here’s why a cooler market can be a hot time to invest

Buying while the market is still softening has definite advantages.

Motivated sellers: Dipping prices and steadily increasing borrowing rates have some property owners feeling the pinch and as the trend continues, they are more likely to sell before the situation bottoms out.

On the other hand, once the downturn does begin to improve, those same sellers will be motivated to hang on to those assets or hold out for a higher price.

Less competition: Wise investors recognize those times when they have the upper hand in the scenario, and that time is now.

Potential buyers looking for Midland real estate are hesitant to move forward in an unstable market, meaning those stories of bidding wars and umpteen-thousands-over-asking are further and fewer between.

Investment value: Properties purchased during a softer market can often be obtained at a lower cost than what was paid even a year ago. As the economy becomes stronger and those properties regain their market value, today’s investors will be left with solid value in long-term assets.

Finding the right financing to secure soft-market investment opportunities

Canada’s inflation rate should begin to slow in early 2023 with costs of energy and other essentials gradually decreasing, and the Bank of Canada is expected to begin reducing borrowing rates towards the end of 2023. Until then, potential buyers looking for additional investment funding are left wondering about their borrowing options.

While investing in property during an inflated economy can seem like a risky move, this market can actually leave buyers in a unique position that brings big returns.

Although your interest rate may be higher in the short term, once interest rates come down, those buyers could see their properties increasing in value hundreds of thousands over a couple years.

To learn more about your investment financing options, contact licensed mortgage broker Jenna Lorette at 705-526-5445 or visit them online here.