If you haven’t heard yet, the Federal Reserve cut interest rates by 0.50 percentage points on September 18, 2024. This marks an important shift after a series of rate hikes aimed at controlling the pandemic-induced inflation.

Investors who haven’t been investing in Real Estate because of the interest rates they’ve been earning with other financial products like money market accounts should take note.

The Federal Reserve is expected to keep cutting rates this year which means your interest could drop to 4% by the end of the year and further to 3% by next year. With inflation at 3%, your real return would effectively be zero. Additionally, you’d forfeit depreciation benefits for writing off existing income and face ordinary income tax rates instead of capital gains.