People today wonder about interest rates and how they impact their property's value. Some owners also ask whether or not we could sell their property for more money now that interest rates have reached near record lows. The answer to this question is that while we definitely need to look into the situation more deeply, the suspicion is that yes, it is quite likely that we could get more for the property now than we could two years ago because of the low-interest-rate environment. That is an interesting development because this particular facility is not generating any more income today than it was two years ago. It is fully stabilized and has been for quite some time, but the reality is that when a buyer looks into purchasing a property, one of the things they have to look at is the cost of capital.
When a buyer gets a loan, they compare the cost of that loan to the income that the property has generated, and the resulting cash-on-cash yield ends up determining, to a very large extent, how much that buyer can pay for the property. And in this particular case, even though the income had not changed in many years because it is currently much less expensive to get a loan today than it was back then, the marketplace can pay more for the facility.
So for that reason alone, if you are thinking about selling, give us a call at 817-932-6100 or reach out to us at www.karrselfstorage.com to learn how the current interest rate market may be benefiting you.