2Settimana·

Key interest rate almost as high as in 2001

Happy Sunday to the community. I am currently looking at $O (+1,37%) and things are not going so well for the REIT at the moment. The next quarterly figures will be announced on February 24th, so I'll wait and see. I will (hopefully) not make the mistake $UPS (+0,29%) I (hopefully) won't make the same mistake again. I took a look at the key interest rate in the USA and it is currently really high. On 27.07.23 it was at 5.5%, but it's currently falling again. Is this related to real estate rentals, or is it the mortgage rate? It is also currently over 7%. I'm sorry if I come across as a bit inexperienced, but I've only been involved in the real estate market for a short time😅

Sources:

Leitzins in den USA bis 2025 | Statista

Vereinigte Staaten von Amerika - Hypothekenzinssatz | 1990-2025 Daten

11 Commenti

Hebel-Horst@DoppelSchlechtMinus

2Settimana

The Fed has just announced that the key interest rate will NOT be lowered any further for the time being.
It is not bad for REITs because of its impact on rents, but because they work heavily with debt capital. You can also take a look at the debt structure in the financial supplement in the business figures. At $O, for example, it was thought at the peak of the high-interest phase that they would get through it well because they would not have to take on a large chunk of new debt until 2026. Of course, the stagnation of the yield curve is now a bad thing. It's still one of the best REITs, but read up a little more on the subject first.

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Hockey_Scout@Hockey_Scout

2Settimana

@DoppelSchlechtMinus As has already been said here, loans/debt are bad for REITs because they are "more expensive". However, I see the advantage in the fact that REITs "have to" optimize their structures, investments, processes and costs and become leaner. In a way, they are trimming their future viability and this will have a positive impact in the coming years.

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Negan@Negan

1Settimana

@DoppelSchlechtMinus very well written and explained!

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Katharine@Derkatz

2Settimana

I keep them in my savings plan until the position is full.

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Maximilian@Max095

2Settimana

I buy at under €45

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Maverick4831@Maverick4831

2Settimana

50€/month in the savings plan. Planned to build up a solid divi payer in the long term.

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Maximilian@Max095

2Settimana

@Maverick4831 Do you think this is a share "for eternity"?

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Maverick4831@Maverick4831

2Settimana

@Max095 I think $O is a solid REIT and consider the value to be sustainable. In addition, they are somewhat diversified with assets in Europe. But I don't have the crystal ball ready either😁.

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Detlef@Lawikhan

2Settimana

My equity has been € 48.7 since 2024. At the moment I would only buy via a savings plan or when equity is reached. Reacts sensitively to interest rates so that buying opportunities may arise. However, the share in my portfolio is already at 5.4%. I hold the REIT as a long-term bond component.

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Yasin21@Yasin21

2Settimana

I also had a small position of 75 shares, sold 25 and invested in something else. I think there will always be opportunities and chances.

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Elfuhr@Elfuhr

2Settimana

I found this article helpful at the time. I don't know if it's all correct, but I had my own thoughts about it. I think the article was from 2023.

https://abilitato.de/realty-income-aktie-ist-die-dividende-in-gefahr-so-gehts-nach-dem-kurseinbruch-weiter/

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