Yes, in almost every case, because a rental lives or dies on cash flow and a higher rate means a bigger payment. The rate is one of the biggest levers on whether a deal pencils, so it deserves real attention. It's one input, though, and strong enough price or terms on the property itself can outweigh it. A real example from a property we own: a Long Beach fourplex bought years ago through seller financing at a 0 percent interest rate. The seller wanted a fixed monthly amount regardless of structure and priced the building above market to get it. Every dollar of the payment went to principal, and the property stayed cash-flow positive through the entire payoff. Treat that as a rule of thumb rather than a license to ignore rate: when the discount or the terms are strong enough, a higher rate on the acquisition can be an acceptable cost of doing business, as long as the deal still cash-flows at that rate. Nobody can promise rates will fall, so never buy a rental counting on a refinance to fix a payment that doesn't work today. Underwrite it to cash flow at the rate you can actually get now, and treat any future refinance as upside.