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What's nuts is not just that investors get to buy homes, but that its tax advantaged to do so. Between prop 13 in California, to 1031 exchanges, there are plen

What's nuts is not just that investors get to buy homes, but that its tax advantaged to do so. Between prop 13 in California, to 1031 exchanges, there are plenty of reasons to invest in RE over even say the stock market. I don't get to do a 1031 exchange for my Meta stock into AAPL or something...

paxys 4y ago
You forgot the biggest one – cheap mortgages backed by unlimited money printing. Ever since 2008 loading up on as much <3% housing debt as you can afford has been a no-brainer investing strategy.
- thehappypm 4y ago
  Investors don’t get the same rates that homeowners do, but they are still quite low.
  - reverend_gonzo 4y ago
    Of the two additional properties I own, marked as investment and vacation, they are 3.5% and 3%, refinanced, and bought during the pandemic. The former, five years prior, was marked as non warrantable, as in no bank would even give a loan for it. So, while investors don’t get the same rates as homeowners, they still got very good rates. If I had had capital, I would have bought a dozen more units at that time. <5% == Free money.
    - nsv 4y ago
      Anything under the inflation rate, which was 10% annual during that period, is free money.
- bamboozled 4y ago
  This is what I find concerning though, we're now seeing the damage of the endless money printing, through inflation. Inflation causes living costs to go up, which means people have less money for rent, which means people who have borrowed to service mortgages don't get money, which has a knock on effect...meltdown. Edit: Will guess I got a downvote for using the world meltdown, which was almost sarcasm because the powers that be will never let this happen.
game_the0ry 4y ago
This was by design - the real estate industry lobbies hard.
- lotsofpulp 4y ago
  In fact, the previous president signed a law removing 1031 exchange for everything except real estate. Coincidentally, the previous president is in the real estate business. https://krscpas.com/the-tax-cuts-and-jobs-act-tcja-and-code-section-1031/ https://krscpas.com/the-tax-cuts-and-jobs-act-tcja-and-code-...
  - game_the0ry 4y ago
    That's bad, but not as bad as when the commercial real estate lobby asked for a straight up bail out back in '08. > In a letter to U.S. Treasury Secretary Henry Paulson, industry organizations have asked that the $200 billion Term Asset-Backed Securities Loan Facility (TALF) provide guarantees or financing, or purchase highly rated asset-backed securities collateralized by new or recently originated mortgages. https://www.reuters.com/article/us-commercialproperty-idUSTRE4BL3ZD20081222 https://www.reuters.com/article/us-commercialproperty-idUSTR...
ndesaulniers 4y ago
1031 exchange?
- xboxnolifes 4y ago
  You can defer capital gains tax on the sale of property if the sale is used to purchase another property.

paxys 4y ago

You forgot the biggest one – cheap mortgages backed by unlimited money printing. Ever since 2008 loading up on as much <3% housing debt as you can afford has been a no-brainer investing strategy.

thehappypm 4y ago
Investors don’t get the same rates that homeowners do, but they are still quite low.
- reverend_gonzo 4y ago
  Of the two additional properties I own, marked as investment and vacation, they are 3.5% and 3%, refinanced, and bought during the pandemic. The former, five years prior, was marked as non warrantable, as in no bank would even give a loan for it. So, while investors don’t get the same rates as homeowners, they still got very good rates. If I had had capital, I would have bought a dozen more units at that time. <5% == Free money.
  - nsv 4y ago
    Anything under the inflation rate, which was 10% annual during that period, is free money.
bamboozled 4y ago
This is what I find concerning though, we're now seeing the damage of the endless money printing, through inflation. Inflation causes living costs to go up, which means people have less money for rent, which means people who have borrowed to service mortgages don't get money, which has a knock on effect...meltdown. Edit: Will guess I got a downvote for using the world meltdown, which was almost sarcasm because the powers that be will never let this happen.

game_the0ry 4y ago

This was by design - the real estate industry lobbies hard.

lotsofpulp 4y ago
In fact, the previous president signed a law removing 1031 exchange for everything except real estate. Coincidentally, the previous president is in the real estate business. https://krscpas.com/the-tax-cuts-and-jobs-act-tcja-and-code-section-1031/ https://krscpas.com/the-tax-cuts-and-jobs-act-tcja-and-code-...
- game_the0ry 4y ago
  That's bad, but not as bad as when the commercial real estate lobby asked for a straight up bail out back in '08. > In a letter to U.S. Treasury Secretary Henry Paulson, industry organizations have asked that the $200 billion Term Asset-Backed Securities Loan Facility (TALF) provide guarantees or financing, or purchase highly rated asset-backed securities collateralized by new or recently originated mortgages. https://www.reuters.com/article/us-commercialproperty-idUSTRE4BL3ZD20081222 https://www.reuters.com/article/us-commercialproperty-idUSTR...

ndesaulniers 4y ago

1031 exchange?

xboxnolifes 4y ago
You can defer capital gains tax on the sale of property if the sale is used to purchase another property.