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Serenity Prayer

God, grant me the serenity to accept the things I cannot change, The courage to change the things I can, And the wisdom to know the difference - Reinhold Niebuhr

Investors should pay more attention to the prayer. Too many investors focus on things that are really out of their control when deciding what to do next. How many readers are able to predict accurately future bank interest rate rates? While it might be safe to say they are more likely to go up vs. down…'more likely' tells us little. There is no sense of when, by how much or anything else.

What an investor can do is figure out how much their loan payment will change for any given interest rate. You can also 'fix' the rent level which you currently collect and then decide at what interest rate the property starts to produce negative cashflow. Once you know the rate which causes you pain, you can work through strategies to deal with it in advance.

What solutions might be available? Each case is different. Here are some ideas.
- Switch loan and lock in a rate for up to 10 years.
- Sell the property and pay off the debt.
- Switch the use of the property so that you can collect more rent for the same building. Normally done by converting a single let into an HMO.
- Or a bigger conversion where you create self-contained flats out of a larger home and then rent the flats as single lets. You could sell some while keeping others.
- Or start trading properties for short term profits while investing more equity in the existing portfolio.

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