Election Ramifications Questions

[Nathan Weber]

Hi,

Firstly, I really hope this doesn't turn into a heated political debate. I'm opening this thread to discuss real estate, not politics and policies.

As someone who is looking to get into real estate I'm now questioning if this is a good time. What concerns me is that I wanted to buy rental properties but after seeing how many landlords are now struggling due to all the pro-tenant laws in NYC (even before covid, again I don't want to get into a discussion whether the policies are right or not) and with the Dems in control of the presidency,house and senate I'm afraid there will be laws passed in more areas making harder for landlords and not worth going into the industry.

Thoughts?

[Mark Smith]

I think a big part of your question is location dependent.  Most of the laws you are referencing are state and local laws vs federal.  

My assessment is the new administration's proposed policies will cause the economy to slow.  Why I think this will trigger the "Politics ruins everything" modifier so I'll leave it at that.

 If my assessment is correct and things do slow, how this plays out in your local market will depend on what the backbone of jobs are in that location.  If the local economy is dependent on 1 big manufacturer or industry, it may be a game changer for that location but if the local economy you are investing in has a good mix of solid industries that will either grow or remain well funded through (think government, public education, military) during the slow down, then you may be ok.  

I suspect property values will not go up or may pull back in some areas, slow means less demand with less demand property values stagnate or pull back.  We will flip from a sellers to a buyers market. 

I suspect financing will get harder and more expensive.  This combined with the buyers market will mean sellers will be more open to creative deals and owner financing.

I suspect rent rates will stagnate near the mid to top of the market but due to demand, low income rates will continue to go up.

I suspect demand for low income rental units will skyrocket as the economy slows or stalls.

For me, this plays into my low income model because all of this will create higher demand for low income housing and allow me to bargain shop for value add mobile home parks to buy cheap and with cheap owner financing.

But, I'm not an economist and this is just my 2 cents.