Forum Replies Created
-
AuthorPosts
-
(former)FormerSanDiegan
Participant3. Eliminate mortgage interest deductions for investment properties
When people make suggestions like this, it shows an obvious misunderstanding of business principles and taxes.
Rental real estate is a business. Business is taxed on the difference between income and expenses. A mortgage is an expense for a real estate business, along with taxes, insurance (which isn’t deductible for homeowners BTW), maintenance ((which isn’t deductible for homeowners BTW), advertising expenses, and the list goes on.
So, mortgage interest for investment property is inherently a business expense. The tax laws that apply also apply to your local restaurant owner who deducts his lease payments as business expenses. It also applies to many of our employers who deduct expenses such as the utility bills, office lease payments, and our salaries and benefits prior to computing the amounts on which they are taxed.
Participant[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
Participant[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
Participant[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
Participant[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
Participant[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
November 4, 2008 at 9:20 AM in reply to: Easy money on next leg down, second Fool’s Rally progressing as expected #298118Participant[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]Last chance ?
EVER ?
I doubt that.
Last chance for 6-18 months, maybe.
November 4, 2008 at 9:20 AM in reply to: Easy money on next leg down, second Fool’s Rally progressing as expected #298467Participant[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]Last chance ?
EVER ?
I doubt that.
Last chance for 6-18 months, maybe.
November 4, 2008 at 9:20 AM in reply to: Easy money on next leg down, second Fool’s Rally progressing as expected #298480Participant[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]Last chance ?
EVER ?
I doubt that.
Last chance for 6-18 months, maybe.
November 4, 2008 at 9:20 AM in reply to: Easy money on next leg down, second Fool’s Rally progressing as expected #298494Participant[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]Last chance ?
EVER ?
I doubt that.
Last chance for 6-18 months, maybe.
November 4, 2008 at 9:20 AM in reply to: Easy money on next leg down, second Fool’s Rally progressing as expected #298541Participant[quote=stockstradr]
I predict this Fool’s Rally will give you YOUR LAST CHANCE to dump those long positions at higher prices, recovering some of your losses.
[/quote]Last chance ?
EVER ?
I doubt that.
Last chance for 6-18 months, maybe.
ParticipantI don’t disagree completely with peterb either. If one has been out of the market I think this is a great time to start dollar-cost-averaging back in over the next 1-2 years to get back to whatever portion of your retirement (long-term money) portfolio you plan to have in stocks for the next 10-20 years.
Still, a hefty cash allocation (for me it’s 40%) is important for stability and to play a little defense.
Also, if you want to use the money within the next 5 years or less (e.g. to buy a home, start a business, etc) I would not put it in stocks.ParticipantI don’t disagree completely with peterb either. If one has been out of the market I think this is a great time to start dollar-cost-averaging back in over the next 1-2 years to get back to whatever portion of your retirement (long-term money) portfolio you plan to have in stocks for the next 10-20 years.
Still, a hefty cash allocation (for me it’s 40%) is important for stability and to play a little defense.
Also, if you want to use the money within the next 5 years or less (e.g. to buy a home, start a business, etc) I would not put it in stocks.ParticipantI don’t disagree completely with peterb either. If one has been out of the market I think this is a great time to start dollar-cost-averaging back in over the next 1-2 years to get back to whatever portion of your retirement (long-term money) portfolio you plan to have in stocks for the next 10-20 years.
Still, a hefty cash allocation (for me it’s 40%) is important for stability and to play a little defense.
Also, if you want to use the money within the next 5 years or less (e.g. to buy a home, start a business, etc) I would not put it in stocks. -
AuthorPosts
