What Real Estate Investments Should You Avoid in the 0.75% Interest Rate Era? Three Principles for Balancing Physical Loans and Crowdfunding: 'Don't Over-Borrow,' 'Move Beyond Yield,' and 'Hyper-Diversification'

In an era where interest rates exist, it is important for real estate investment to look not only at 'high yield' but also at 'whether you can continue even if interest rates rise.'

'Policy interest rate to 0.75%'

Hearing such news, some of you may have felt anxious about whether your current real estate investment is okay.

During the long era of ultra-low interest rates, the approach of 'borrowing loans at low interest rates and buying high-yield properties' was common in real estate investment.

However, in a phase where interest rates are rising, the premises for the same investment change.

In this article, we will explain how to use physical real estate (using loans) and real estate crowdfunding (CF) in a way that is easy for beginners to understand.

How do real estate prices change when interest rates rise?

▼ What you will learn in this part

Before choosing an investment method, let's organize how the real estate market itself is likely to change.

In the first place, when interest rates rise, the impact spreads to the real estate market like a domino effect.

How are real estate prices determined? The impact of rising interest rates on prices

When interest rates rise, downward pressure is easily applied to real estate prices.

However, hearing just this, many people will likely feel, 'Why do real estate prices tend to fall when interest rates rise?'

Here, we will organize how interest rate hikes ripple through to prices, starting from the basic concept of real estate pricing.

Calculation formulas you should know in a rising interest rate phase

What is important is the following calculation formula...

Please see the rest below ⇩