Donald Trump & Real Estate Investing

Cary F. · 2016-11-09T05:54:05-08:00

I'm interested to hear what investors think about Donald Trump as President as it pertains to real estate investing. Here's some of the things I'm thinking about:Demand for Rent: Presidential elections do not change the demand for rent. Or do they?Tax Shelters: Trump is a real estate investor and conservatives (including Congress) are for less regulation, therefore real estate tax shelters should remain intact Volatility in Policy - Republicans now run the show. How will new policies change the economy?International Relations - How will Trump engage the global community? Will trade agreements be changed thus impacting us in a good/bad way?Interest Rates - What will rates do now? The answer here lies in the economic impact of republican policy implementations. I think rates will stay low...Home Prices - Is there a risk of volatility in home prices with an unpredictable person in office? Again, I think this is a function of the economy as a whole.I believe that the fundamentals haven't changed and I'm obviously still bullish on REI. (FYI, I'm also investing in the Cleveland area which generally hasn't experienced much price volatility.)What do other investors think? I'm very interested in gaining perspective from people who have been here before. Markets always overreact when volatility presents itself (recall Brexit). Stocks will tank today. The Peso is getting crushed. People are panicked. In a week, stability will take back over and markets should calm down. My question is more about what the LASTING changes of a Trump presidency will be.Thanks in advance!

Aaron Knoll

Investor · Sandy, UT · Member since 2015 · 70 posts · 47 votes

9y

It is bad news. America has just signaled to the world "we are not sane, and your business is not welcome here".

A lot of foreign investors will flee the US. The value of overpriced condos in Miami, Boston, Seattle, and other foreign investment destinations, will tank. The dollar will tank. There may be some areas that will suffer less than others -- the suburbs, rural areas, major employment centers with comparatively sane real estate costs (Austin, research triangle, Salt Lake City, Denver). But make no mistake: we're in for a rough ride.

26 Reply

Tyler Ansell

Investor · Tampa, FL · Member since 2015 · 293 posts · 175 votes

9y

Why would foreign business people leave a country that just elected someone with conservative policies towards business and tax? @Aaron Knoll

44 Reply

Justin Fox

Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes

9y

I was really hoping my target fund would have 'collapsed' this morning like they said last night. No luck : (.

2 Reply

Carlos Coppin Jr

Wholesaler · Plantation, FL · Member since 2014 · 194 posts · 121 votes

9y

oh boy here we go! *SIGH*

36 Reply

Mike HurneyPro Member

Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 545 votes

9y

@Tyler Ansell)

If you're careful at making money in Real Estate, you'll do well no matter who's elected. Let's get to work. I'm proud to be an American - Let's hope he drains that swamp a little....

51 Reply

Cary F.

OP

Investor · Lakewood, OH · Member since 2016 · 203 posts · 191 votes

9y

@Aaron Knoll

What evidence do you have to support any of these claims? They all seem to be speculative in nature. You could be right, but what is the source of your info?

@Tyler Ansell Agree that swamp does need to be drained a bit. I'm proud to be American as well. I'm feeling optimistic about the wealth that we can generate for ourselves in this awesome economy.

Yeah that's a general comment but I can support what I'm saying with statistical evidence.

Thanks everyone!

4 Reply

Eliana Posada

Colombia, South America · Member since 2016 · 15 posts · 5 votes

9y

@Aaron Knoll foreign investments will wait to see what happens to the US economy.

2 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

9y

As a non American I see a definite up side to Trump. To bring back industry he will need to throw up trade tariffs. Wages will defiantly need to be drastically cut, 30-50% to revitalize industry, free trade removed (good for Canadian Industry). Minimum wage laws removed. reduced welfare, Income tax brackets seriously reduced to reflect lower incomes. Tax breaks for industry to return. It will be a long slow road but in the process investors will benefit with the decline of real estate values while demand for rental units will climb. Rents may drop but property values will decrease at a greater rate to compensate. High appreciation areas will flat line as foreign investors pull back.

Canada may become less dependant on the US and build our own industry back up as well. If we establish our own oil refineries we can stop selling oil to the US and benefit as well. Hopefully the US dollar will drop as well giving Canadians more buying power in the US. We will need to tighten up on immigration into Canada from the US but that should not have a economic impact on Canada.

Over all good for investors and industry, not so positive for working class. Overall a win/win situation for those with money to invest.

4 Reply

Todd Michaels

Investor · Chicago, IL · Member since 2015 · 29 posts · 9 votes

9y

Short term I don't see much change for REI. Longer term his tax plan does not help the middle class or lower incomes which will leave rent prices stagnant at best.

4 Reply

Bill R.

Henderson, NV · Member since 2014 · 111 posts · 163 votes

9y

I think the biggest issue is that he never clearly defined any of his policies (the devil is often in the details) but wants to upend a lot of existing policies which leads to the US not being predictable for both citizens as well as foreign investors as one of the reasons they're investing in the US in the first place is because of the stability.

25 Reply

Robert M.

Investor · Dundee, OR · Member since 2016 · 104 posts · 162 votes

9y

Originally posted by @Aaron Knoll:

It is bad news. America has just signaled to the world "we are not sane, and your business is not welcome here".

A lot of foreign investors will flee the US. The value of overpriced condos in Miami, Boston, Seattle, and other foreign investment destinations, will tank. The dollar will tank. There may be some areas that will suffer less than others -- the suburbs, rural areas, major employment centers with comparatively sane real estate costs (Austin, research triangle, Salt Lake City, Denver). But make no mistake: we're in for a rough ride.

So far im making gains in the stock market. Im a buyer of investments, not fear. The market is up, and so is real estate. No worries here. Gild is surging, Aria is surging, and I expect my heath care premiums to decline.

8 Reply

John CasmonPro Member

Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes

9y

Originally posted by @Thomas S.:

As a non American I see a definite up side to Trump. To bring back industry he will need to throw up trade tariffs. Wages will defiantly need to be drastically cut, 30-50% to revitalize industry, free trade removed (good for Canadian Industry). Minimum wage laws removed. reduced welfare, Income tax brackets seriously reduced to reflect lower incomes. Tax breaks for industry to return. It will be a long slow road but in the process investors will benefit with the decline of real estate values while demand for rental units will climb. Rents may drop but property values will decrease at a greater rate to compensate. High appreciation areas will flat line as foreign investors pull back.

Canada may become less dependant on the US and build our own industry back up as well. If we establish our own oil refineries we can stop selling oil to the US and benefit as well. Hopefully the US dollar will drop as well giving Canadians more buying power in the US. We will need to tighten up on immigration into Canada from the US but that should not have a economic impact on Canada.

Over all good for investors and industry, not so positive for working class. Overall a win/win situation for those with money to invest.

I read this twice and I'm still looking for the upside you're suggesting. Wages drastically reduced, declining real estate values (how is this good for investors?), rents will drop, high appreciation areas to flat line, US dollar dropping in value....is the upside just for Canada?

11 Reply

David Song

Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes

9y

I think it is good for REI. Higher tarriff will increase the consumer price, and higher U.S. Salary. The higher income for US renters will help to boost RE prices. One potential downside: limit illegal immigrants: might reduce the demand for rental in some areas. I really do not agree that Foreign investment in U.S. Will decease. To the contrary, I think it will increase. A U.S. First policy will benefit RE in U.S. More government spending on infrastructure is also good. I am going to check some properties today. 😀😀😀

6 Reply

Mike HurneyPro Member

Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 545 votes

9y

@Bill R.

"never clearly defined any of his policies (the devil is often in the details)"

Between Ockham's razor and Nike's slogan we should be fine!

3 Reply

Shanequa J.

Realtor · Houston, TX · Member since 2011 · 916 posts · 296 votes

9y

@Thomas S. It sounds as if you want the US economy to tank so the Canada's can rise and y'all can buy up all of the assets here.

3 Reply

Ryan Dossey

Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes

9y

Ahhh nothing like a good mix of business and politics.

7 Reply

Zach Quick

Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes

9y

Originally posted by @John Casmon:

Originally posted by @Thomas S.:

As a non American I see a definite up side to Trump. To bring back industry he will need to throw up trade tariffs. Wages will defiantly need to be drastically cut, 30-50% to revitalize industry, free trade removed (good for Canadian Industry). Minimum wage laws removed. reduced welfare, Income tax brackets seriously reduced to reflect lower incomes. Tax breaks for industry to return. It will be a long slow road but in the process investors will benefit with the decline of real estate values while demand for rental units will climb. Rents may drop but property values will decrease at a greater rate to compensate. High appreciation areas will flat line as foreign investors pull back.

Canada may become less dependant on the US and build our own industry back up as well. If we establish our own oil refineries we can stop selling oil to the US and benefit as well. Hopefully the US dollar will drop as well giving Canadians more buying power in the US. We will need to tighten up on immigration into Canada from the US but that should not have a economic impact on Canada.

Over all good for investors and industry, not so positive for working class. Overall a win/win situation for those with money to invest.

I read this twice and I'm still looking for the upside you're suggesting. Wages drastically reduced, declining real estate values (how is this good for investors?), rents will drop, high appreciation areas to flat line, US dollar dropping in value....is the upside just for Canada?

He does live in Toronto...

2 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

9y

The up side is for American investors to buy low and benefit when the economy returns, similar to after 2008.

Obviously I would like what ever is necessary for our Canadian dollar to rise and I don't care how that comes about but I personally have zero interest in investing in the US.

Most Americans got what they want from this election but will be very disappointed with the collateral damage it will cause. You can not have your cake and eat it too.

Just to be clear I have zero interest in politics and zero confidence in any political leader. This is simply the flavour of the month topic. American politics has been elevated to it's most popular social level....reality TV.

8 Reply

Ray Lai

Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes

9y

I see some interesting conjecture based on the election outcome based on some good logic in this thread. Let's look at the facts though.

Last night the markets were down to the limits and people were afraid, just like Brexit, at what happened. This morning the market is essentially flat as people digested the news. Perhaps it had something to do with the way Trump handled himself in the acceptance speech? That's conjecture with no way to prove and rather pointless to say.

Ultimately, one shouldn't make huge decisions for their business based on hypothesis that cannot be proven. You will succeed at your real estate business if you dedicate yourself to doing the hard work and creating win-wins for all the team members you work with.

For the record, I voted for Gary Johnson because I think less taxes and less government is good for business but end of the day, no matter who won, it shouldn't matter to your real estate investing. The driver of success for your business should be you. You should be focused on building good teams, processes, and relationships to help yourself succeed.

If you want to talk about tools/processes, I'd love to hear a discussion on that. It's more useful talking about things that we can directly affect in our circle of influence (7 Habits) then things outside of our control (national politics). Wouldn't you rather focus your efforts on making your real estate investing more successful? Do you use all the tools available to you (people and applications) to maximize your efficiency and output?

Here's a conjecture but does it really help?

If Trump slaps on tariffs on some goods, like home-building construction materials from China, the cost of completing your rehab projects would go up. The importance of properly managing inventory and negotiating discounts when ordering in bulk is increased. Will it stop you from investing in real estate? No, but does it change the inputs to your formulas for your flip? Absolutely.

22 Reply

Account Closed

Rental Property Investor · Portland, OR · Member since 2015 · 338 posts · 332 votes

9y

Stock prices tank as a result of uncertainty in the markets. Investors seek out tangible assets like gold and real estate instead. Real estate prices increase. Renters and middle income working families suffer.

3 Reply

John CasmonPro Member

Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes

9y

Originally posted by @Zach Quick:

Originally posted by @John Casmon:

Originally posted by @Thomas S.:

As a non American I see a definite up side to Trump. To bring back industry he will need to throw up trade tariffs. Wages will defiantly need to be drastically cut, 30-50% to revitalize industry, free trade removed (good for Canadian Industry). Minimum wage laws removed. reduced welfare, Income tax brackets seriously reduced to reflect lower incomes. Tax breaks for industry to return. It will be a long slow road but in the process investors will benefit with the decline of real estate values while demand for rental units will climb. Rents may drop but property values will decrease at a greater rate to compensate. High appreciation areas will flat line as foreign investors pull back.

Canada may become less dependant on the US and build our own industry back up as well. If we establish our own oil refineries we can stop selling oil to the US and benefit as well. Hopefully the US dollar will drop as well giving Canadians more buying power in the US. We will need to tighten up on immigration into Canada from the US but that should not have a economic impact on Canada.

Over all good for investors and industry, not so positive for working class. Overall a win/win situation for those with money to invest.

I read this twice and I'm still looking for the upside you're suggesting. Wages drastically reduced, declining real estate values (how is this good for investors?), rents will drop, high appreciation areas to flat line, US dollar dropping in value....is the upside just for Canada?

He does live in Toronto...

Even so, I have a hard time imagining how a weak US economy (Greg S's prediction) could be good for Canada or Canadian investing in the US.

As for the original question, Trump is unpredictable and never detailed his plans, but a republican senate, house and president should be good for RE investors as it relates to RE policies (tax codes, 1031 exchange, new policies, etc.).

4 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

9y

@Zach Quick

He does live in Toronto...

Correct, and obviously as with any investor my primary goal is putting more money in my pocket. What else could possibly matter. Fairly certain it is also Trumps primary goal. No harm in that and hopefully those with the money will benefit greatly.

0 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

9y

Well, it does matter:

Spending, increased deficit, lower personal taxes, tax base shrinks, spend on projects the deficit increases, that reduces bond prices, low bonds, mortgage rates go up.

Higher interest rates pushes home prices down, people buy what the can afford, rents follow prices as well, in the buy-rent analysis, I won't pay higher rents if I can buy for the same or less.

Prediction of bond prices falling from WSJ in 6 to 9 months, rates will follow.

Higher rates usually means lenders tighten up, they will want premium loans, not marginal borrowers.

Your roofer might be leaving the country, the next guy will want to make more than the immigrant dude......go figure!

Trump didn't say no trade, just better trade deals, but that can move foreign investment away too.

Trump is more likely to increase minimum wage than reduce it, it stimulates the velocity of money that runs the engine.

HUD funding may be in more trouble, public housing and Sec. 8 can get squeezed.

I don't suggest building spec homes, better stick to contract jobs with qualified buyers.

Already commented on another thread about the CFPB, options and financing rules, that won't be a quick thing. The plan for the EPA and HUD might be quicker.

The financial markets hate uncertainty, that's where we are now and will be until the administration unfolds showing more cards.

Overall, micro investor strategies probably won't change much, not in the first year but rates will have a longer term effect.

And, true, there is money to be made in real estate regardless of the economy, look at the 80's or at the past balloon popping, it's how you play the game under the rules.....and that always changes. :)

11 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

9y

Trump is more likely to increase minimum wage than reduce it, it stimulates the velocity of money that runs the engine.

NO way, minimum wages must drop, blue collar wages must drop. Industry will never return without a major cut in production costs. Not that lower wages will be the incentive required.

Industry is gone to a better place, same with our industry in Canada, gone forever. Nothing politicians do will ever change the global economy. Small business is the true key to economic growth and that must have a lower minimum wage to grow.

As income property investors, those with the gold, we benefit from a struggling working class. It's good for our business. We want people living pay check to pay check to keep them out of the home ownership world.

Our bread and butter comes from the economic struggles of others.

2 Reply

Justin Fox

Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes

9y

Lower personal taxes do not wildly affect the revenue from those sources.

Here

0 Reply

Donald Trump & Real Estate Investing

Donald Trump & Real Estate Investing

Most Popular Reply

147 Replies