Will last month’s fiscal crisis bill actually boost the housing market and demand for distressed property notes?
The standoff and hype surrounding the fiscal cliff had many worried that falling over the edge without a deal or harsh new taxation on high income earners would crush the economy and demand for U.S. real estate.
While not everyone got exactly what they wanted out of the last-minute deal, the final agreement seems to be exactly what was needed to boost the U.S. housing market and increase the appetite for investment.
There could potentially be a few more foreclosures as a result of those being hit with higher taxes decide to fold and stop fighting against the odds. However, despite some ending up with slightly smaller paychecks increased confidence in the market ought to open the flood gates for more investing.
With extensions for tax breaks on capital gains, mortgage debt forgiveness, mortgage insurance, and mortgage interest, real estate perhaps offers an even more attractive investment than ever. It means a great tax shelter and way to offset lower take home pay with increased investment yields. Plus, it puts those acquiring distressed property notes in an even better position for negotiating and curing non-performing loans or seizing the underlying properties and selling them.
The outlook for 2013 is more than bright. Most expect a record-breaking year for appreciation, home sales volume, and rising rents, so the only real challenge for investors is likely to be finding the best deals on distressed property and notes.
Getting the edge is all about knowing where to look, how to get ahead of the competition, and making the right contacts with those holding this paper and REOs.