Maybe slightly off topic (and maybe you've even touched on this in other articles), but what do you make of
the inevitable increase in Interest Rates and that impact on DGI stocks in general?
Not exact matches
As we face the
inevitable summer
interest rate hike, an
increasing number of Canadian homeowners are opting for combination mortgages,
in which part of the principal is paid off at a fixed
interest rate, and part is paid off at a variable
rate.
Additional developments including
inevitable increases in the Bank of England base
rate, which impacts the
interest rates on bank accounts, the end of the Term Funding Scheme
in February, and
increased competition with more challenger banks coming into the market, will go a long way towards ensuring that the returns for clients» cash improve.
When you run the cash flow numbers (don't stop at NOI and cap
rate), many of these properties will go into negative cash flow with a 2 %
increase in interest rate (which I believe is
inevitable within 5 years, the typical maturity term of many loans).