What the Presidential Election means for Real Estate

So before I get some epic triggered replies, this won’t be a political right vs. left email, its a discussion. 

That being said, many of us are in Real Estate or are planning to invest in Real Estate.

Owning Real Estate in the United States, as a United States citizen, comes with a lot of benefits.

1. Cash Flow (Hopefully, if you’re smart)
2. Principal Pay Down
3. Interest Write Offs
4. Depreciation Write Offs
5. Primary Home Tax Exemption (250k/500k)
6. 1031 Exchanges

Just to name a few…

The United States tax code is literally written to benefit Owners… of businesses, equities and real estate. There could (likely will, but how extreme is TBD) be some changes coming depending on which party wins the election.

According to a Bloomberg article linked HERE the Biden Administration is planning to go after 1031 Exchanges and Depreciation Write Offs to help support a plan to increase care for Children and Elderly, specifically.

Now, let’s look at both sides, which is important to do when crafting our opinions on a particular topic.

1031 exchanges are great for investors and allow them to defer taxes on gains by investing in like-kind properties… essentially trading UP… for the betterment of the community. Each time property is sold and purchased, a lot of parties get paid. Think about it.

That being said, how come other investments don’t have the same rules… like Equities and Business Ownership, for example.

Would it be better if Capital Gains tax was even all the way around, at a reduced rate? Or is it necessary to give Real Estate a special rule?

When it comes to depreciation write offs, there’s two sides… the pro side is the write off is necessary because the actual building depreciates and has extensive repairs over time, while the land is what actually appreciates. Other side of coin is the system is too favorable for investors providing too much incentive and tax breaks… many investors that “make” hundreds of thousands to even millions +++, are able to show minimal, zero or negative on their returns. Is that fair? Thats not up to me to decide.

I’ve read that the depreciation write offs rule will only be applied to investors that earn a before tax income of $400,000 or higher… we will see.

Let me know what you think about this with a reply!

Speaking of Real Estate Investing, this week’s episode of the podcast featured Ryan Burke, a master level Investor and former speaker/coach for Fortune Builders. He shared his strategies and tactics to flip over 1,000 properties and how he owns 100’s of doors for passive income.

I specifically loved his off market seller lead strategy, so check it out and listen through the end.

Use the links below to subscribe and download:

Apple Podcasts
Spotify Podcasts

Cheers,
Chase

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