Why Buyers And Sellers Are Happy With Higher Duplex Prices

What’s one of the best but least discussed reasons it’s a great time to buy or sell a Minneapolis duplex?

Interest rates.

Perhaps we’ve all become a little numb to the news that interest rates are at historic lows. After all, it’s been in the headlines for years.

Let me explain why it matters.

Six months ago, interest rates for duplex investors hovered around 6 percent.

I met with a number of duplex owners who wanted to sell, but when I calculated investment property analysis worksheets to help determine value, the sellers and I quickly realized it didn’t make financial sense either to them or duplex investors active in today’s market.

I have been calling many of those same people in the last two months. Why? Because a reduction of 2 percent in interest rates suddenly makes their property incredibly attractive to buyers.

Each percentage in interest is the annual equivalent of one percent of the mortgage amount. So, on a $200,000 loan, that’s a savings of $4000 a year.

That not only helps many duplexes provide a terrific return on investment, it also allows buyers afford a higher market price, which is better for sellers.

In other words, as long as interest rates remain low, everybody wins.