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~67% of homes are owner occupied. It's unlikely ~100% of the investor owned homes are free and clear and only ~3% of owner occupied homes are owned free and cl

~67% of homes are owner occupied. It's unlikely ~100% of the investor owned homes are free and clear and only ~3% of owner occupied homes are owned free and clear. For one, the tax code HEAVILY incentivizes investors to own property on leverage. For two, the only reason property is/was a good investment was because of artificially low interest rates for most of the last ~25 years (an entire generation of investors). When you combine that with a leveraged bet that cannot be margin called, you will make a FORTUNE (and many did). Leverage was the way. I'm willing to bet the majority of free and clear owned homes are owner occupied (simply because 2/3rds of homes are owner occupied).

victor106 3y ago
> he tax code HEAVILY incentivizes investors to own property on leverage How? any resources I can find on this topic?
- FooBarBizBazz 3y ago
  I think this is referring to -- 1. The mortgage interest deduction (reduced under Trump, of all presidents). 2. 1031 Exchange elections, which let you avoid capital gains.
  - ryandrake 3y ago
    > The mortgage interest deduction (reduced under Trump, of all presidents). The way I understand it, reducing the mortgage interest deduction disproportionately affected homeowners with higher mortgages in high cost of living areas, just like reducing the SALT deduction affected people in higher income tax/cost of living areas. Both of these were likely supported by President Trump to punish "blue staters" in these areas.
jjav 3y ago
> the tax code HEAVILY incentivizes investors to own property on leverage Can you expand on this claim? Mortgage interest deduction is often talked about but realize that unless you itemize deductions you can't do it, and itemizing has been made very difficult so most people won't qualify[1]. There are many good reasons own your home, but tax code benefits is not one of them. [1] https://taxfoundation.org/blog/standard-deduction-itemized-deductions-current-law-2019/ https://taxfoundation.org/blog/standard-deduction-itemized-d...

victor106 3y ago

> he tax code HEAVILY incentivizes investors to own property on leverage How? any resources I can find on this topic?

FooBarBizBazz 3y ago
I think this is referring to -- 1. The mortgage interest deduction (reduced under Trump, of all presidents). 2. 1031 Exchange elections, which let you avoid capital gains.
- ryandrake 3y ago
  > The mortgage interest deduction (reduced under Trump, of all presidents). The way I understand it, reducing the mortgage interest deduction disproportionately affected homeowners with higher mortgages in high cost of living areas, just like reducing the SALT deduction affected people in higher income tax/cost of living areas. Both of these were likely supported by President Trump to punish "blue staters" in these areas.

jjav 3y ago

> the tax code HEAVILY incentivizes investors to own property on leverage Can you expand on this claim? Mortgage interest deduction is often talked about but realize that unless you itemize deductions you can't do it, and itemizing has been made very difficult so most people won't qualify[1]. There are many good reasons own your home, but tax code benefits is not one of them. [1] https://taxfoundation.org/blog/standard-deduction-itemized-deductions-current-law-2019/ https://taxfoundation.org/blog/standard-deduction-itemized-d...