Corona Virus vs Interest Rates

With the Corona Virus showing its impact on the global economy, following the US lead, Canada dropped it’s Bank of Canada interest rate today by .5%. It was also reported that this interest reduction was also a result of the rail blockades, strikes by Ontario teachers and winter storms.

So what do lower interest rates mean for real estate entrepreneurs?

1. Opportunity to purchase real estate with a lower cost to borrow…people tend to buy payments on houses rather than prices of houses so this will start people thinking about purchasing real estate.

2. Because the interest rates are dropping, demand for housing will go up because more people will enter the market and the prices will begin to increase as demand goes up.

3. More players in the market means more competition to buy and more multiple offers to deal with in hot markets.

4. With the global economy struggling, so is the stock and bond market … the DOW Jones Industrial Average has lost over 12% in one week!!!! People are panicking, selling stocks and liquidating to cash. For me, this is a great opportunity to market Joint Ventures and present solid stable consistent returns on real estate to potential JV partners.

5. Lower interest rates mean higher principal paydown for variable-rate mortgages, debt gets paid down quicker and I own debt-free property a lot sooner! Love that!

6. Mortgage qualification just got a little easier, as interest rates drop so do the stress test rates which contribute to your ability to qualify for mortgages.

Savvy investors are in a buying mode right now… whether it’s low rate mortgages to buy real estate or an opportunity to buy some underpriced stock in good companies.

My advice is to be careful about what you choose to invest in. Don’t make the mistake of investing in a product you don’t have the financial IQ to support. It’s tempting to take hot tips from friends’ financial advisors and taxi cab drivers right now, given the uncertainty of the economy. Invest only in what you know or partner with someone you trust who has the financial IQ in the product they invest in. There is nothing wrong with sitting on cash right now waiting for the well-studied opportunity!

For me, I just bought another property today…opportunity is knocking and we are taking full advantage of that.

Kind Regards,

John C. Heeney, CEO Glenroe Lending

Glenroe Farms Limited ( Private Lending )

We build LEGACY to create TRANQUILITY

john@glenroelending.ca

519 808 7370